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Life Policy Lapse and Surrenders at 5.7%

With over $12 Trillion of individual life insurance inforce for 2018 the individual policy combined lapse and surrender rate was 5.7% or $69 Billion in life insurance cancelling with no benefits paid (just premiums collected by insurance companies) as reported by the American Council of Life Insurers.

The voluntary termination rate of individual life insurance
policies reached 5.7 percent by 2018 (Table 7.4). Of
the individual life policies that have been voluntarily
terminated, 19% were surrendered based on face amount.


Disturbingly only about 3,000 life insurance policies were sold for the fair market value in life settlement transactions that year. Compared to the over 9 million individual policies terminating in 2018 one can only image that a significant number of seniors missed out on significant value being offered in the secondary market for life insurance.