Term Insurance Market (By Type: Individual Level Term Life Insurance, Group Level Term Life Insurance; By Distribution Channel) - Global Industry Analysis, Size, Share, Growth, Trends, Revenue, Regional Outlook and Forecast 2024-2033

The global term insurance market was surpassed at USD 1,058.12 billion in 2023 and is expected to hit around USD 2,443.59 billion by 2033, growing at a CAGR of 8.73% from 2024 to 2033. 

Key Pointers

• Asia Pacific region led the market with revenue share of 31% in 2023.
• Europe region is predicted to grow at the remarkable CAGR from 2024 to 2033.
• By Type, the individual-level term life insurance segment generated the maximum market share of 76% in 2023.
• By Type, the group-level term insurance segment is expected to grow at the fastest CAGR between 2024 to 2033.
• By Distribution Channel, the tied agents & branches segment captured the maximum market share of 53% in 2023.
• By Distribution Channel, the brokers segment is anticipated to register significant growth over the forecast period.

Term Insurance Market Overview 

The term insurance market encompasses a significant segment within the broader insurance industry, offering a distinctive approach to providing financial protection for individuals and their families. This form of life insurance is characterized by its simplicity, affordability, and focused coverage, making it a popular choice among consumers seeking risk mitigation without the complexities often associated with other insurance products.

Term Insurance Market Growth

The growth of the term insurance market is propelled by several key factors. Increasing awareness of the importance of financial planning and the need for comprehensive risk coverage has significantly contributed to the market's expansion. As individuals recognize the necessity of safeguarding their families' financial well-being, the simplicity and transparency of term insurance make it an attractive option. Affordability is another driving factor, with the straightforward structure of term insurance policies often resulting in lower premiums compared to other life insurance products. Demographic shifts, especially the rise of a financially conscious younger population, further fuel the demand for term insurance. Insurers' commitment to innovation and customization, offering options such as critical illness or disability riders, enhances the market's adaptability to diverse consumer needs. With these factors in play, the term insurance market is poised for sustained growth as it continues to address the evolving preferences of individuals seeking accessible and straightforward risk coverage.

Report Scope of the Term Insurance Market

Term Insurance Market Dynamics

Drivers

• Demographic Trends: Shifting demographics, characterized by a rising population of financially conscious individuals, contribute to the market's expansion. Younger demographics, in particular, are drawn to the simplicity and transparency of term insurance, driving demand in this age group.
• Customization Options: Insurers' commitment to innovation plays a crucial role in market dynamics. The availability of customization options, such as adding critical illness or disability riders, enhances the appeal of term insurance by allowing individuals to tailor their coverage to specific needs.

Restraints

• Limited Investment Component: One of the notable restraints in the term insurance market is the absence of an investment or savings component. Unlike other life insurance products, term insurance primarily focuses on providing a death benefit without the potential for cash value accumulation. This limitation may deter individuals seeking insurance options that offer both protection and a financial growth component.
• Premiums with No Return: Term insurance premiums, while generally more affordable, represent a cost without any return if the policyholder outlives the policy term. Some consumers may perceive this as a drawback, especially when comparing term insurance to other life insurance products that provide a cash value or return on investment over time.

Opportunities

• Customization for Niche Markets: Tailoring term insurance products to address specific niche markets or demographics presents a significant opportunity. Customization options, including specialized riders and coverage features, can cater to the unique needs and preferences of different consumer segments.
• Innovative Product Offerings: The dynamic nature of the insurance industry allows for continuous innovation in product offerings. Insurance providers have the opportunity to develop and introduce innovative features, such as hybrid policies that combine term and investment components, to cater to diverse consumer preferences.

Type Insights

The individual-level term life insurance segment dominated the market with the highest revenue share of 76% in 2023. 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 held the largest revenue share of 53% in 2023. 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.

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 with revenue share of 31% in 2023. 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.

Europe is predicted to grow at the remarkable CAGR 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.

Term Insurance Market Key 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 Segmentations:

By Type

• Individual Level Term Life Insurance
• Group Level Term Life Insurance
• Decreasing Term Life Insurance

By Distribution Channel

• Tied Agents & Branches
• Brokers
• Others

By Region

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa