Death Benefit Payouts Continue To Rise At The Top 100 Companies
The amount the life insurance industry distributes to beneficiaries continues to grow, as measured by death benefits paid out by the top 100 companies in this category.
The top 100 companies increased their payouts from 1999-2003 by a respective 4%, 10%, 7%, 3% and 8%, according to National Underwriter Insurance Data Services/Highline Data, from data culled from the NAIC Annual statement database.
The increases may be in part due to two factors: an increase in the number of policies and the dollar amount of life insurance purchased over a 60-year period; and, an aging population that is fueling a rise in the number of deaths in the United States.
From 1940 through 2001, the number of policies and certificates purchased annually increased from about 18.2 million to about 40.1 million, according to the 2004 Fact Book published by the American Council of Life Insurers, Washington. In dollar terms, the purchase amount grew from $10.7 billion to $2.77 trillion during that same period, it says.
That growth reversed in 2002, the Fact Book says, when the number of new policies dropped to 38.7 million and continued in 2003 when it declined further to 35.5 million. Even so, the dollar amount grew to $2.8 trillion in 2003.
Even as the amount of life insurance grows, the population that purchased life insurance during those six decades continues to age. The age 65 and over population was 16.6 million in 1960 and 34.7 million in 2000. It is expected to grow to 39.4 million by 2010.
And, even though the mortality rate in the U.S. is on the decline, the number of deaths has actually grown, due perhaps to an increase in the population in this country.
The U.S. mortality rate in 1950 was 9.6% and the number of actual deaths excluding Alaska and Hawaii was 1.45 million, according to the Statistical Abstracts of the United States. In 2002, the mortality rate dropped to 8.5% while the number of deaths increased to 2.44 million, data from the Statistical Abstracts indicated. The mortality rate dropped even further to 8.3% in 2004, according to the Center for Disease Control, a division of the U.S. Department of Health and Human Services, which compiles mortality data.