The Federal Reserve Board sees the percentage of U.S. households with cash-value life insurance dropping.
The share of households with that asset fell to 16.1% in 2022, from 19% in 2019. it was 35.5% in 1989, according to the Fed's latest Survey of Consumer Finances report.
For families with cash-value life, the mean value of that asset increased to $55,270, from $47,470.
What it means: Individual retirement accounts, 401(k) plans and other retirement accounts are capturing some of the cash that clients might have once used to pay for life insurance.
The survey: The Fed has been conducting the Survey of Consumer Finances every three years since 1989, to get detailed information about families' finances.
The survey team interviewed 4,602 families for the new survey.
The team managers emphasize that the figures related to high-income and high-net-worth families are based on interviews with a relatively small number of wealthy households, and that wealthy people appear to be less likely to participate in financial surveys than lower-income people.
The cash-value life asset value figures reflect only the actual cash value of the life insurance, not the death benefits.
For cash-life insurance, another issue may be that some survey participants may not remember that they have cash-value life insurance and may not describe life insurance policies' cash value correctly.
Assets vs. assets: Although the percentage of U.S. households with cash-value life insurance is falling, life insurance continues to be more widely held than some other types of assets.
