Term Insurance Statistics

In the spring of 1993, Penn State University completed a study regarding the fate of term life insurance policies.  The study includes over 20,000 term policies with an aggregate face amount of $4,000,000,000. It includes 1-5 year, 10 year, 20 year, and term to age to age 65 contracts which contained renewal and/or conversion features. 

Here are some interesting results of the study:

1. More than 90% of all policies are terminated or converted. 
2. 45% of all policies are terminated or converted in the first year. 
3. 72% of all policies are terminated or converted within the first 3 years. 
4. The average duration before termination or conversion is 2 years. 
5. Less than 1 policy in 10 survives the period for which it was written. 
6. After 15-20 years exposure, less than 1% of all term life policies are still in force. 
7. Only 1% of all term insurance resulted in death claims.

Considering the above findings, the odds are 100 to 1 against term insurance ever being a death claim!1

If you plan on purchasing term insurance, at least get your premiums back. Click here to learn more about term insurance that returns your premium payments if you out live the term.