The Global Term Life Insurance Market Will See Significant Growth At 9.67% Up To 2023
The global term life insurance market was valued at $778.8 billion in 2019, and is expected to grow to $1,126.6 billion in 2023 at a compound annual growth rate (CAGR) of 9.67%. Growth in the forecast period can be attributed to the growth of the middle-class groups in the emerging markets, increase in chronic diseases and disabilities, and increase in home ownership and mortgages.
The increase in the growth of the middle-class population in emerging countries such as India and China is expected to drive the insurance market, including term life insurance. The middle-class segment is growing rapidly and is forecasted to reach 5.3 billion by 2030, with majority of the growth taking place in Asian countries such as India, China, Indonesia, and Philippines. Increasing number of middle-income groups translates to higher disposable incomes, which allows them to opt for term life insurance to secure their family from financial burden, thereby increasing the demand for term life insurances.
The global term life insurance market will also be driven by increased incidence rates of chronic diseases and physical disabilities. The market is driven by the increased fear of chronic diseases, which forces parents of young children to opt for term life insurance. According to the World Health Organization, the global burden of major chronic diseases currently accounts for 43% of all diseases and is set to rise to 60% by 2020. According to a United Nations report on world population aging, during 2015-2030, globally, the population aged 60+ is projected to grow by 56% to reach 1.4 billion. Growth of the aging population and rising chronic disease incidence will contribute to increased fear for the dependents, thereby increasing demand for term life insurance.
In addition, the market is expected to be driven by increase in home ownerships and mortgages. Increasing home ownerships drive the term life insurance market as decreasing term life insurance is often sold alongside a mortgage. Decreasing term life insurance is a type of life insurance policy which is paid over a fixed period of time. The level of pay-out decreases over the length of the policy. This type of insurance is often used to cover the balance of a repayment mortgage, because this is a type of loan that also decreases over time. For example, according to the English Housing Survey 2018-19, 41% of people in the age bracket of 25-34 years live in a home they own in the UK. The study shows an increase in home ownership among young people after a decade of decline. This increase is expected to continue in the forecast period, thus driving the global term life insurance market.