The life insurance industry is growing, but for the most part, the vast majority of policies sold are in the first three years.
That’s according to a new analysis of federal data by The Life Insurers Association.
According to the association, a whopping 95.9% of policies issued in the 2018-2019 financial year were in the third year of life.
In other words, in the three years before the start of a new policy year, the majority of policy holders are in their second year.
The report comes on the heels of a survey by The Kaiser Family Foundation that found life insurance policies in 2018 are still in high demand, with an average of almost 5,000 people a month signing up for the policy.
The average rate for the 2018 fiscal year was $2,095, up from $2.891 in 2017.
The Life Insurance Association found that life insurance policy holders were generally more satisfied with their coverage than in the past, with a median satisfaction rating of 77% in 2018.
The association noted that the average life insurance payout per policy was about $5,800, compared with $3,700 in the 2017 fiscal year.
A new life insurance rule would be good news for those who are not financially comfortable or can’t afford the premiums.
The new rule, which was announced last year, allows insurers to raise rates to 10% or 20% in a three-year period.
The higher rates will lower out-of-pocket expenses and allow more coverage to be purchased.
Under the rule, life insurance companies can offer policies with higher premiums for consumers who qualify, and it’s unclear how the policy will impact insurance rates.
For many consumers, the new rule could help with affordability issues, said Lori Moulton, executive director of the association.