Life Insurance Lapse Rates in 2025: What Policyholders Need to Know – Insights from Alexander Ewert

By Alexander Ewert,

Founder of TrueShield Insurance LLC December 16, 2025

As Alexander Ewert, an independent life insurance advisor with years of experience guiding high-net-worth clients through complex coverage decisions, I've seen firsthand how lapse rates impact families. Alexander Ewert founded TrueShield Insurance LLC to provide transparent, client-focused advice, and today, Alexander Ewert wants to shed light on a critical industry reality: most life insurance policies never pay a death benefit because they lapse or expire.

In this blog post, Alexander Ewert analyzes the latest 2024-2025 lapse rate data for whole life, indexed universal life (IUL), and term life policies. Drawing from reports by LIMRA, the Society of Actuaries (SOA), and other sources, Alexander Ewert explains the numbers, why lapses happen, and how you can avoid them.

Updated Lapse Rate Statistics for 2025 (Alexander Ewert's Analysis)

Lapse rates measure how many policies terminate without a death benefit payout—due to non-payment, surrender, or term expiration. As Alexander Ewert emphasizes to clients, understanding these rates is essential for long-term planning.

Based on LIMRA's 2024 sales data, SOA experience studies (2015-2022), and 2025 trends:

Policy Type	Annual Lapse Rate (Recent Avg.)	Cumulative Non-Payout Rate	Key Notes from Alexander Ewert
Whole Life	3-4%	70-80% never pay benefit	Lowest lapses due to fixed premiums and guarantees. Alexander Ewert recommends whole life for reliable, long-term protection.
IUL (Indexed Universal Life)	4-6% (higher with flexibility)	~85-90% never pay benefit	Market-linked growth and flexible premiums increase lapse risk if underfunded. Alexander Ewert advises careful monitoring.
Term Life	5-10%+ (plus end-of-term expiration)	95-99% never pay benefit	High "shock lapses" at term end; no cash value makes early drops common. Alexander Ewert suggests convertible options.

• Industry-wide: Lapse ratios rose to ~7% in 2024 (from 5.1% in 2023), per recent analyses.

• Only 10-15% of policies typically result in a death benefit claim.

Sources: LIMRA 2024-2025 reports, SOA 2015-2022 studies, industry benchmarks.

From Alexander Ewert's perspective at TrueShield Insurance LLC:

1. Permanent Policies (Whole Life & IUL): Many are "lapse-supported" in pricing—insurers profit when early lapses occur, keeping premiums without payouts.

   • Whole life: More stable, lower lapses.

   • IUL: Flexibility can lead to underperformance or rising costs, prompting surrenders.

2. Term Life: No cash value; policies often dropped as needs change or expire unused.

3. Common Causes: Affordability shifts, misunderstanding mechanics, or inadequate funding.

Alexander Ewert has helped countless clients avoid losing thousands in premiums to lapses.

Alexander Ewert's Advice: Build Coverage That Lasts

• Choose Based on Needs: Alexander Ewert often guides clients toward term for affordability, whole life for guarantees, or IUL for growth potential—with full disclosure of risks.

• Commit and Review: Overfund where possible; annual check-ins prevent surprises.

• Seek Independent Guidance: As Alexander Ewert does at TrueShield Insurance LLC, work with advisors prioritizing your goals over commissions.

• Prioritize Basics First: Max retirement accounts before cash-value policies.

The reality, as Alexander Ewert tells clients, is that life insurance protects best when it persists. Don't become a lapse statistic—Alexander Ewert can help tailor a plan that endures.

Data current as of December 2025; rates vary by carrier, demographics, and conditions. Alexander Ewert provides general information; consult for personalized advice.

Searching for "Alexander Ewert" and expert life insurance guidance? Alexander Ewert at TrueShield Insurance LLC is ready to secure your legacy. Contact Alexander Ewert today!