The Federal Reserve Board sees the share of U.S. households with cash-value life insurance coverage dropping.
The share of households with that asset fell to 16.1% in 2022, from 19% in 2019. it was 35.5% in 1989, in line with the Fed’s newest Survey of Shopper Funds report.
For households with cash-value life, the imply worth of that asset elevated to $55,270, from $47,470.
What it means: Particular person retirement accounts, 401(ok) plans and different retirement accounts are capturing a few of the money that purchasers might need as soon as used to pay for all times insurance coverage.
The survey: The Fed has been conducting the Survey of Shopper Funds each three years since 1989, to get detailed details about households’ funds.
The survey workforce interviewed 4,602 households for the brand new survey.
The workforce managers emphasize that the figures associated to high-income and high-net-worth households are primarily based on interviews with a comparatively small variety of rich households, and that rich folks seem like much less prone to take part in monetary surveys than lower-income folks.
The cash-value life asset worth figures mirror solely the precise money worth of the life insurance coverage, not the loss of life advantages.
For cash-life insurance coverage, one other situation could also be that some survey contributors could not keep in mind that they’ve cash-value life insurance coverage and will not describe life insurance coverage insurance policies’ money worth appropriately.
Belongings vs. belongings: Though the share of U.S. households with cash-value life insurance coverage is falling, life insurance coverage continues to be extra extensively held than another kinds of belongings.