GVR Report cover Term Insurance Market Size, Share & Trends Report

Term Insurance Market Size, Share & Trends Analysis Report By Type (Individual Level Term Life Insurance, Group Level Term Life Insurance), By Distribution Channel, By Region, And Segment Forecasts, 2023 - 2030

  • Report ID: GVR-4-68039-935-9
  • Number of Report Pages: 120
  • Format: PDF, Horizon Databook
  • Historical Range: 2017 - 2021
  • Forecast Period: 2023 - 2030 
  • Industry: Technology

Term Insurance Market Size & Trends

The global term insurance market size was estimated at USD 988.42 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 8.7% from 2023 to 2030. Term insurance is a type of life insurance policy that provides coverage for a specified period or term. Cost-effectiveness, increased awareness, customization, and flexibility are some of the key factors that are driving the adoption of term insurance. In addition, changing demographics, emphasis on financial security, and evolving insurance market trends are further contributing to the market's growth.

U.S. Term Insurance Market size and growth rate, 2023 - 2030

Term life insurance offers coverage for a specified duration, in contrast to whole life insurance, which necessitates ongoing payments throughout the consumer's life. Common term life insurance lengths include 10, 20, or 30 years. The increasing number of term life insurance holders across the globe is boosting the segment's growth. Term life insurance is more popular compared to permanent policies. According to recent data from the American Council of Life Insurers, 48% of households in the U.S. have reported holding a term life policy, making it the most popular choice in comparison to cash value policies.

The influence of digital transformation is significantly contributing to the market growth. Digital transformation is enhancing operational efficiency and elevating customer transformation, which is benefiting both insurers and policyholders. A recent survey conducted in February 2023 revealed that 60% of consumers see web-based communication as their primary means of engaging with insurance companies in the future. This growing consumer preference for digital interactions, coupled with the enthusiastic adoption of digital transformation technologies by term insurers, is expected to be a significant driving force for the growth of the market.

InsurTech is proving to be a compelling opportunity within the term insurance industry. By harnessing the latest technological advancements, such as the Internet of Things (IoT), Artificial Intelligence (AI), and big data analytics, InsurTech streamlines operations, reduces costs, and enables more competitive pricing of term insurance products. Moreover, InsurTech's impact extends to claims processing, risk assessment, contract drafting, and policy underwriting, making these processes significantly more effective. In an evolving insurance landscape, the rise of InsurTech companies is fundamentally reshaping the way term insurers operate and serve their customers.

The term insurance industry encounters its own set of challenges, with regulatory pressures being a significant concern. Regulators globally are pushing for standardized frameworks, requiring term insurance providers to adapt to risk-based organizational structures and demanding substantial resources and adjustments. Moreover, the focus on consumer-centric governance, aimed at protecting policyholders, introduces additional complexities. Additionally, cybersecurity threats pose a large risk due to the sensitive and personal data handled by the term insurance companies. Navigating these evolving regulations and data security concerns is imperative for the market long-term growth.

Type Insights

The individual-level term life insurance segment dominated the market and accounted for a revenue share of more than 75.0% in 2022. Individual-level term insurance is a personalized life insurance product that offers coverage for a specified term, often ranging from 10 to 30 years. What sets it apart is that the premiums are determined based on the individual's health, age, and lifestyle factors. This unique approach tailors the policy to the insured person's specific circumstances, ensuring that they receive the most cost-effective coverage. The increasing demand for individualized financial protection, combined with the ease of customization, has fueled the segment's growth.

The group-level term insurance segment is anticipated to grow significantly over the forecast period. Group-level term insurance is a specialized form of life insurance designed for members of a particular group, such as employees within a company. It offers a collective coverage arrangement where the premiums and benefits are determined based on the characteristics and needs of the entire group. This results in more affordable rates for individual members due to the group's size and shared risk. The growth in this segment is primarily driven by the cost-efficiency it offers, making it an attractive employee benefit for businesses and organizations. Moreover, the ease of enrollment is further enhancing the segment's adoption.

Distribution Channel Insights

The tied agents & branches segment dominated the market and accounted for a revenue share of more than 52.0% in 2022. Tied agents are playing a pivotal role as distribution channels in the market. These agents, exclusively affiliated with a single insurance company, are gaining prominence due to their in-depth product knowledge, personalized customer service, and strong brand association. Their deep client relationships, honed over time, foster trust, and client loyalty. Tied agents are instrumental in simplifying complex insurance options, making term insurance more accessible and comprehensible, thereby driving the growth of this segment.

Global Term Insurance Market share and size, 2022

The brokers segment is anticipated to register significant growth over the forecast period. Brokers serve as a significant distribution channel in the market. They offer unbiased advice and access to a wide range of insurance products from multiple providers. Their role in comparing options and finding tailored coverage solutions has gained popularity, especially as consumers seek greater customization and competitive pricing. This transparency and choice, coupled with the increasing consumer demand for comprehensive coverage, are driving the growth of brokers as a prominent and trusted distribution channel in the market.

Regional Insights

Asia Pacific dominated the market and accounted for a revenue share of more than 30.0% in 2022. The Asia Pacific region is witnessing significant growth in the market due to its large and diverse population, especially in emerging economies such as India and China. With aging demographics, awareness of the importance of life insurance is on the rise. Moreover, the presence of numerous life insurance companies in the region, coupled with government support and the embrace of digital technologies, is creating substantial opportunities for new product development and overall industry advancement.

Term Insurance Market Trends, by Region, 2023 - 2030

Europe is anticipated to register significant growth over the forecast period. The market in Europe is experiencing significant growth due to a combination of factors. Regulatory changes, economic uncertainties, and an aging population have prompted individuals to seek financial security, driving increased demand for term insurance. Technological advancements and market competition have also played a pivotal role in the sector's expansion. This growth is indicative of a region increasingly recognizing the importance of term insurance as a valuable tool for financial planning and protection.

Key Companies & Market Share Insights

The term insurance industry is characterized by its fragmented nature, with a multitude of small and niche players operating within it. This market caters to a diverse customer base, spanning various sectors such as finance, healthcare, and technology. Key market participants are proactively driving innovation and introducing unique solutions tailored to the specific requirements of these industries. In addition, the market is constantly evolving, embracing emerging technologies, and adapting to changing demographics and consumer preferences.

Numerous life insurance companies are focusing on launching term life products to provide immediate protection and support the larger financial goals of customers. In May 2023, New York Life, the mutual life insurer in America, introduced a wide range of competitively priced term life products. These offerings deliver enhanced value for clients' protection investments while fostering readiness for financial uncertainties and opportunities. Designed for small business owners and individuals, New York Life’s updated term life suite includes Level Term, Yearly Renewable Term, and Options to purchase additional living benefits. Such initiatives are harnessing the market’s growth.

Key Term Insurance Companies:

  • MetLife Services and Solutions, LLC.
  • Aegon Life Insurance Company Limited
  • Prudential Financial, Inc.
  • The Northwestern Mutual Life Insurance Company
  • State Farm Mutual Automobile Insurance Company
  • Massachusetts Mutual Life Insurance Company
  • American International Group, Inc.
  • Lincoln National Corporation
  • John Hancock
  • China Life Insurance (Overseas) Company Limited
  • Bajaj Allianz Life Insurance Co. Ltd.

Term Insurance Market Report Scope

Report Attribute

Details

Market size value in 2023

USD 1,058.08 billion

Revenue forecast in 2030

USD 1,897.40 billion

Growth rate

CAGR of 8.7% from 2023 to 2030

Base year of estimation

2022

Historical data

2017 - 2021

Forecast period

2023 - 2030

Report updated

December 2023

Quantitative units

Revenue in USD billion, and CAGR from 2023 to 2030

Report coverage

Revenue forecast, company market share, competitive landscape, growth factors, and trends

Segments covered

Type, distribution channel, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; UK; Germany; France; China; India; Japan; South Korea; Australia; Brazil; Mexico; Kingdom of Saudi Arabia (KSA); UAE; South Africa

Key companies profiled

MetLife Services and Solutions, LLC.; Aegon Life Insurance Company Limited; Prudential Financial, Inc.; The Northwestern Mutual Life Insurance Company; State Farm Mutual Automobile Insurance Company; Massachusetts Mutual Life Insurance Company; American International Group, Inc.; Lincoln National Corporation; John Hancock; China Life Insurance (Overseas) Company Limited; Bajaj Allianz Life Insurance Co. Ltd.

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Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope

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Global Term Insurance Market Report Segmentation

The report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global term insurance market report based on type, distribution channel, and region:

Global Term Insurance Market Report Segmentation

  • Type Outlook (Revenue, USD Billion, 2017 - 2030)

    • Individual Level Term Life Insurance

    • Group Level Term Life Insurance

    • Decreasing Term Life Insurance

  • Distribution Channel Outlook (Revenue, USD Billion, 2017 - 2030)

    • Tied Agents & Branches

    • Brokers

    • Others

  • Regional Outlook (Revenue, USD Billion, 2017 - 2030)

    • North America

      • U.S.

      • Canada

    • Europe

      • Germany

      • UK

      • France

    • Asia Pacific

      • China

      • India

      • Japan

      • South Korea

      • Australia

    • Latin America

      • Brazil

      • Mexico

    • Middle East & Africa

      • Kingdom of Saudi Arabia (KSA)

      • UAE

      • South Africa

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