Research from LIMRA shows that most permanent life sales in the United States are made not to the wealthy, but rather to people the middle and working classes. Most of these clients say they purchased insurance to cover their funeral costs and burial expenses.
The research organisation says it has found a "growing trend" of Americans who are using permanent life insurance policies to achieve their financial objectives in retirement. While term life insurance has gained in popularity, LIMRA’s Facts of Life and Annuities report reveals that most life insurance purchases in the United States are for permanent insurance products.
"In fact, more than 71% of all permanent life insurance policies issued in 2013 were for those who make less than $100,000 a year," says LIMRA.
When LIMRA asked people why they own life insurance (respondents could give more than one answer), the top five reasons were:
- Burial and final expenses (87%)
- Leave an inheritance (62%)
- Replace lost income (60%)
- Pay off mortgage (52%)
- Pay off home expense (47%)
"Regardless of the type of life insurance, 86% of Americans believe that most people should have life insurance," concludes LIMRA.