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$1.5 Billion Per Day
Friday, 31 August 2012 14:21

Life Insurance: How important is the life insurance industry to America? The industry pays out $1.5 billion in benefits per day.

The life insurance industry has substantial assets under management. Assets held by life insurers back the companies' life, annuity, and health liabilities. Accumulating these assets, through the collection of premiums from policyholders and earnings on investments, provides our economy with a important source of investment capital.

At the end of 2010, the life insurance industry in America had $5.3 trillion in total assets. Life insurance companies represent one of the largest investors in U.S. capital markets:

  • Life insurers are the single largest source of bond financing for American business, holding 17% of all U.S. corporate bonds.
  • Life insurers invest in American business for the long-term. More than 33% of bonds held by life insurers had a maturity of more than 20 years at the time of purchase. More than 60% had a maturity of more than 10 years.
  • Of the $769 billion in government bonds held by life insurers, the overwhelming majority, $740 billion, were in long-term obligations.
  • Life insurers provide long-term capital to the commercial mortgage market, financing more than $299 billion, or 9.5%, of U.S. commercial mortgages.

Life insurers benefits include not only life insurance, but also disability income insurance, long-term care insurance, and annuity benefits - offering peace of mind to Americans when they need it most. Highlights of benefits paid in 2010:

  • $58 billion to life insurance beneficiaries
  • $70 billion in annuity payments
  • $16 billion in disability income insurance benefits
  • $7 billion in long-term care insurance benefits

There are over 900 life insurance companies in the United States, employing more than 2.2 million Americans, provinding over $19 trillion of life insurance protection for families and businesses.

These are all very large numbers from an industry that loves to talk about big numbers, but the most imporant question isn't how big the industry is, or how old a company is, but whether or not a family has protection in place when it's needed most.

The numbers that matter are the breadwinner's income that's replaced, the mortgages that are paid off, the monthly utility bills that are paid, the food on the table that's paid for, the college tuition for a child that's paid for with life insurance benefits.

That's what life insurance is about - Providing financial security to the people we love when we aren't there to provide it ourselves.

 


 

September is Life Insurance Awareness Month. If you haven't reviewed your coverage in the last year, call me today at (800) 680-5596.

 

Brent D. Gardner, CLU, ChFC