What Would Happen (To Premiums) If Everybody Had Life Insurance?

Would your premiums go up or down?
As I understand it, a Life Insurance Policy is a kind of reverse annuity-you pay a fixed amount of money every month, and in return, the company pays your survivors a fixed amount of money when you die.
Now, the company does this by investing your money in things like stocks, land, real estate etc. They know (through actuarial science) how long you can be expected to live, so they can calculate how much to charge you.
If everybody was insured, a huge amount of money would be flowing in to investment markets-so yields on bonds, stocks, etc. could be expected to drop.
Would this mean that the companies would have to charge you more, for an equivalent amount of coverage?

I assume you’re referring to term life insurance, in which you pay a fixed amount every month for a pre-determined number of years. The company knows the odds of you dying in that period, based on your personal circumstances. The general idea behind term life insurance is that you get it when you’re young, because it’s a) cheap (because you’re not likely to die), and b) most useful to you, since you don’t have any savings. By the time you retire, you shouldn’t need life insurance (in theory), and if you attempt to get a term life insurance policy when you’re 70, it’s extremely expensive, and works more like a savings account at that point.

So what sort of terms is “everyone” going to have to get? Will they be insured indefinitely (until they die)?

If you say, everyone is required to get a term life insurance policy that will cover them until they’re 65, then I think rates would go down, because there’s currently a lot of young, healthy people who don’t bother with life insurance. That would just be free money for insurance companies, and they could use it to subsidize higher risk folks.

If you say, everyone is required to be insured until they die, rates would go up, because you remove the artificial limitation that makes life insurance relatively cheap in the first place (that is, odds are the insurance company will never pay out).

Or were you talking about a different type of insurance?

It shouldn’t change at all for term insurance, where I believe the premiums are calculated to cover the actual expected payout costs from people dying, plus a bit for the insurance company’s overhead and profits.

If more people were insured by a single insurer, then premiums should be expected to fall a little bit, both because the overhead per insured person will be lower due to some fixed costs being spread about further, and because with a larger population of insured, the actual deaths should adhere more closely to the actuarial averages, meaning the insurance company can afford to accept less profit without risk of being unable to pay out.