Main menu


Americans are buying life insurance because of the corona pandemic

Many companies have noticed a double increase in the number of life insurance policies they sold during the Covid-19 pandemic compared to last year.

Experts said the increase was largely due to fear of death and increased awareness of the financial risks associated with deaths.

Life insurance is experiencing a small renaissance as a result of the coronavirus pandemic.

Consumers, especially younger ones, have been buying insurance in bulk since the spring, when thousands of Americans started getting sick and dying from Covid-19.

Experts say this finding makes sense, given life insurance's primary use: as financial support in the event of death.

For example, what happens if the breadwinner dies unexpectedly from Covid-19? The insurance aims to close that immediate gap in family income.

"It put the idea of ​​financial protection and death on the minds of consumers in a way that very few events happened," said Jennifer Fitzgerald, CEO and co-founder of Policygenius, an online marketplace for life insurance.

Insurance sales have been down for years. In 2020, just over half of American adults reported having a life insurance policy, up from 63% a decade ago, according to Limra, the insurance industry group.

Fitzgerald, whose company gets a large chunk of business from online inquiries, said Google search traffic for "life insurance" increased 50% between March and May this year compared to the same period in 2019. .

At the time, a large part of the country was under current protection orders and the poorly understood virus was infecting thousands every day and the vast capacity of hospitals.

Covid-19 has killed more than 200,000 Americans, with tens of thousands of new cases emerging every day. It is estimated that the death toll could double by the end of the year.

Northwestern Mutual, the nation's largest life insurance seller last year, saw a 15% increase in the number of life insurance policies it sold between April and September, compared to the same period last year, according to a spokesman.

Also, AccuQuote, an online insurance marketplace, has seen its policy sales grow 30% as a result of the pandemic, said Byron O'Dell, the company's founder, president and CEO.

Life insurance for everyone. There is nothing older people just need.

Across the industry, there was a 2% increase in the second quarter compared to the total number of life insurance policies sold compared to the previous year, according to Limra. However, big increases are likely to appear in reports for the second half of the year, according to Manoj O'Briete, a life insurance analyst at consultancy Aite Group.

Young consumers

Younger consumers seem to buy insurance in greater numbers than other age groups.

There was a 13% increase in life insurance claims among the under 44 age group in the third quarter compared to the third quarter of 2019, compared to a 9% increase for those aged 45 to 59 and 0.4% for the group over 60 years. Years. According to MIB, the insurance analysis company.

"Life insurance is for everyone," Leopreti said. There is nothing older people just need.

"The needs are different," he said.

Term insurance

Experts said the increase in sales was particularly evident for term life insurance, which is widely considered the simplest and most affordable product in the industry.

Consumers buy insurance for a specific period, perhaps 10, 20, or 30 years, which differs from "permanent" products like Whole Life Insurance and Whole Life Insurance. Monthly fees are set during that period.

Experts said cheaper insurance options were more attractive to consumers given growing economic uncertainty during the coronavirus recession.

Larry Ribka, president and CEO of Valmark Financial Group, a financial advisory firm based in Akron, Ohio, which has seen life insurance claims among clients rise 25% this year through September, says insurance to term is the right solution for 90%. From consumers.

"They want to take care of their children, pay the mortgage payments, and they only need coverage for a while," Ripka said.

Digital corridors

Haven Life, which is owned by MassMutual, saw a 34% increase in the number of life insurance policies it sold in the second and third quarters of this year, compared to the same period last year, according to a spokeswoman. The insurance company only sells temporary insurance.

But there is another trend that has ostensibly contributed to the rise in the number of online marketers like Haven Life: Consumers have sought digital interaction amid a pandemic marked by the need for social distancing, according to experts.

Online brokers largely don't require medical exams to get coverage, especially for policies ranging from $ 500,000 to roughly $ 1 million, reducing personal interaction, experts say.


Experts have said that life insurers cannot reject insurance claims due to Covid-19, but many companies have placed underwriting restrictions on some groups who are at higher risk of dying if they contract the virus.

"Those over 60, and especially those over 70, are affected in terms of their ability to buy anything if they have heart and lung problems, diabetes, obesity, etc.," said Udell of AccuQuote.

O'Dell said some insurance companies have increased premiums for new buyers and are unlikely to do so in the future, especially for long-term insurance.

He said this is largely due to low interest rates, making it difficult for companies to honor their financial guarantees to policyholders in the absence of higher premiums.