The embedded life insurance opportunity is small but growing. Almost one-third of insurance transactions could be embedded in the next five years, per EY, as insurers mature digitally and suitable partners and data proliferate. We expect the total percentage to be smaller for life insurance. Still, life is the largest insurance market in the US—at $1.148 trillion, per NAIC—and the opportunity is too substantial to ignore.

Providers that participate in the market will grow their customer bases. Despite its high value, life insurance penetration is low: Just 50.0% of US consumers had coverage in 2022, and that’ll tick down to 47.5% by 2025, per our forecast. Insurers could reverse this trend by embedding products at the point-of-sale of non-insurance products—getting them in front of consumers who otherwise might not have explored life insurance.

Incumbents still have the power to upend industry dynamics—but they need to secure partnerships today. There’s a clear first-mover opportunity, as disruption from startups has been limited: Most insurtechs have focused on embedding P&C insurance, which is relatively simple.

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