A few days ago I posted a video about the life insurance gap in the US and the comments confirmed something I see every day in my practice.
@RosaBaez-rz7ii wrote: «Life insurance isn't good. It's better to buy something that makes you money, like a house. You rent it out and have money every month... Life insurance, impossible, it's useless.» And @Luciopiacenza333 was more direct: «Obviously because it's a scam. What insurance companies want is to NOT PAY.»
I wasn't surprised by the comments. In fact, I was prepared for them.
As that conversation was happening, the March 2026 data told another story: The U.S. life insurance industry ended 2025 with a record $1.4175 trillion in new premiums, according to the LIMRA report published this year. A 101% year-over-year increase in 2024, driven by a 121% year-over-year increase in the volume of policies sold.
Someone has to be wrong. Either Rosa and Lucio, or the millions of families who bought coverage last year. This article attempts to explain why, in reality, everyone is partly right.
Editorial information
- Author: Luis Orlando Hernandez.
- Author Details: Agent with Active License in Florida (#W290644) and 40 other states | NPN: 17776979. Verify the license here. link.
- Our history: More than 10 years as an Official Health Insurance Agency in the United States.
- Sources: U.S. Individual Life Insurance Record 2025 — LIMRA · 2025 Insurance Barometer Study — LIMRA & Life Happens · Benefits and Claims 2024 — Insurance Information Institute · Hispanic Community and Life Insurance — Life Happens
- Important Note: This content is for informational purposes only and does not substitute for personalized professional advice. Consult with a licensed agent.
- Last updated: May 5, 2026
Rosa's argument: "a house is better"
Rosa isn't making anything up. Real estate is a tried-and-true investment vehicle, and it makes sense to favor it if what you're looking for is passive income. The problem lies in the comparison: It's putting an investment instrument up against a protection instrument..
The question Rosa doesn't ask herself is this: What will happen to her family next month if she isn't there?
For a property to generate an inheritance, you need initial capital, years of approved credit, and decades of mortgage payments. Moreover, a property tends to be illiquid — it can take months to sell when money is needed most.
In contrast, a life insurance policy creates that heritage from the very first day it goes into effect. According to the 2025 LIMRA Insurance Barometer Study, a 30-year-old non-smoking woman can obtain $500,000 in 20-year term coverage for approximately $20 to $30 per month — about the cost of two streaming subscriptions. Building that same amount of capital through savings or real estate appreciation would take decades.
And for those who want insurance to "work like an investment," the market already has an answer. The IUL (Indexed Universal Life) segment reached a record $4.5 billion in 2025, accounting for 25% of the total market, while VUL (Variable Universal Life) grew by 17% to $2.6 billion, according to LIMRA. These products combine protection with cash value accumulation — without leaving the family exposed to a 30-year mortgage debt if the policyholder passes away in month one.
Meanwhile, term life insurance grew by 31% year-over-year between 2024 and 2025, reaching $3.1 billion in new premiums, according to the same LIMRA report.
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Lucio's argument: "it's a fraud"
Lucio doesn't speak with data. He speaks with distrust, and that's understandable.
But the evidence does not support that generalization. According to industry data, more than 99% of claims are paid by top-rated insurers. In absolute numbers, the industry paid out $965.6 billion in total benefits in 2024 — including death benefits, annuities, and disability — compared to $831.8 billion in 2023, according to the Insurance Information Institute.
Are there denials? Yes. The most common causes are not corporate malice: they occur when the insured omitted or misrepresented medical information on the original application. During the first two years of coverage — the so-called contestability period — the insurer can investigate whether there were any omissions. Once that period has passed, with the policy active and premiums up to date, the company is contractually and legally obligated to pay. If they failed to do so systematically, they would lose their state license.
What does exist, and is a real problem, is the sale of products that are not well explained, or that are not suitable for the client's profile. In those cases, the fault lies not with the product, but with the process. That is why choosing the right agent matters just as much as choosing the right policy.
The gap that concerns me most: Hispanics
This is where the urgent educational work is most needed.
The 2025 Insurance Barometer Study found that life insurance coverage among Hispanics dropped eleven percentage points, from 51% in 2021 to 40% in 2025 — the lowest rate among all ethnic groups in the country. At the same time, 53% of Hispanics say they need more protection, eleven points above the national average, and 46% of Hispanic families admit they would face serious financial hardship in less than six months if the primary breadwinner were to pass away unexpectedly.
We are the group that needs coverage the most and has it the least.
The most straightforward explanation: more than 72% of Hispanics overestimate the cost of a basic life insurance policy, and 44% consider it too expensive. The actual cost can be as low as $20 a month. This perception distances them from protection that they could, in fact, afford.
Added to this is something I frequently see in my consultations and that the organization Life Happens has also documented: the belief that children or extended family will take care of everything if something happens. That support network exists and is real, but it doesn't make a mortgage debt manageable, nor does it prevent children from having to drop out of school to cover household expenses.
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What the 2025 data really says
The $17.5 billion record cannot be explained simply by having more agents on the street. The 2025 LIMRA study found that 41% of Americans consider themselves poorly informed or not informed at all about life insurance, and that approximately 75% overestimate its cost.
What changed in 2025 was the process: faster digital underwriting, fewer medical exams required for intermediate amounts, and a generation that, after years of economic uncertainty, started seeking stability over performance.
That is why, when someone writes "it's a scam" in the comments, they aren't asking to be sold a policy. They are asking for someone to honestly explain how it works. The market's growth suggests that "someone" is appearing more and more frequently.
To close
Rosa is right that real estate is a powerful tool. Lucio is also right: any financial institution must be demanded to have total transparency. The problem is that while we get stuck in that debate, time keeps passing and the family remains exposed.
The question that really matters isn't what the "deal of the century" is, but rather: which tool protects my loved ones starting today, with what I have today?
When that question is answered with data and without any sales pressure, the conversation changes. The $17.5 billion figure for 2025 isn’t just a record in an Excel spreadsheet—it represents millions of people who decided to set aside their doubts and seek answers.
If you want to see real numbers and get a no-obligation life insurance quote, call us at Dulcinea Insurance at 786-910-9487. The advice is free, in Spanish, and, above all, honest.
Related Topics: To [Life insurance quote tool] to [Requirements to purchase life insurance]
