NCPA - National Center for Policy Analysis

Americans Shunning Life Insurance

June 8, 1998

For a number of reasons, Americans are deciding there are better places to invest their money than in life insurance -- sending life insurance sales into something of a free fall.

  • Fifteen years ago, Americans bought 17.7 million new life insurance policies.
  • Last year, they bought only 11.1 million policies -- a 37 percent drop.
  • Less than half of all American households have life insurance beyond the often minimal coverage provided by employers -- compared to three-quarters of households in the 1960s.
  • Noting that many baby boomers prefer to "self insure" by investing in the booming stock market, some traditional insurance companies have begun to emphasize financial planning and other investment services, while focusing less on insurance sales.

Experts say the increase in the number of two-earner families explains some of the decline in insurance sales. Spouses realize they can continue to work and support a household in the event of a partner's death.

Also, due to a distrust of Social Security and Medicare, more people are putting their money in mutual funds and other equities in a search for the best returns they can get to finance their retirement.

Source: Joseph B. Treaster, "A Fall in Demand for Life Insurance Changes Industry," New York Times, June 8, 1998.


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