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What Explains the Decline in Life Insurance Ownership?

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Life insurance ownership has declined markedly over the past 30 years, continuing a trend that began as early as 1960. In 1989, 77 percent of households owned life insurance (see figure 1). By 2013, that share had fallen to 60 percent. This article analyzes factors that might have contributed to the decline in life insurance ownership from 1989 to 2013. The focus of our analysis is on two broad sources of potential change in the demand for life insurance: changes in the socioeconomic and demographic characteristics of the population and changes in how those same characteristics are associated with the decision to purchase life insurance. In addition, we highlight the considerable diversity in life insurance ownership across education, income, and race and ethnicity and describe how trends in life insurance ownership vary across these groups.

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  • Daniel Hartley & Anna L. Paulson & Katerina Powers, 2017. "What Explains the Decline in Life Insurance Ownership?," Economic Perspectives, Federal Reserve Bank of Chicago, issue 8, pages 1-20.
    • Handle: RePEc:fip:fedhep:00029
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    1. Barry Mulholland & Michael Finke & Sandra Huston, 2016. "Understanding the Shift in Demand for Cash Value Life Insurance," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 19(1), pages 7-36, March.
    2. Menahem E. Yaari, 1965. "Uncertain Lifetime, Life Insurance, and the Theory of the Consumer," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(2), pages 137-150.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
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