By Maria Sassian Triple-I Consultant
The COVID-19 pandemic contributed to a reduction in life expectancy in the United States for the first time in decades, according to the Centers for Disease Control and Prevention (CDC). After climbing steadily for many years, life expectancy fell by 1.5 years from 2019 to 2020 — the largest one-year baptism since World War II, when it fell by 2.9 years between 1
Life expectancy at birth for the total the population decreased from 78.8 in 2019 to 77.3 in 2020. The gloomy outlook for mortality, as well as the economic chaos caused by the pandemic, has led many to consider protecting their loved ones with life insurance.
A survey by Life Happens and LIMRA published in April 2021 showed that about 31 percent of consumers said they are more likely to buy life insurance due to the pandemic. And the latest information shows that they followed up on that intention. Total life insurance premiums in the US increased by 21 percent during the second quarter of 2021, the largest increase compared to the previous year since the third quarter of 1987. For the first half of 2021, the total premium increased by 18 percent compared to the first six months of 2020, LIMRA reports.
Life insurance now attracts younger customers. LIMRA's survey shows that 45 percent of millennials said they are more likely to buy life insurance because of COVID-19. This increased interest can be explained by the fact that younger people are more likely to have children who are minors and higher amounts of outstanding mortgage debt to cover if they die. Younger workers also encountered higher unemployment throughout the pandemic compared to older workers, so they may have purchased individual insurance to compensate for the loss of employer-sponsored insurance.
Decisions to buy insurance or increase coverage also vary by race. Deloitte research found that underinsured Latin American / Latin buyers were most interested in increasing life insurance coverage in response to the pandemic, followed closely by black buyers. Deloitte speculates that this is due to higher unemployment among blacks and Hispanics / Latin people during the pandemic, which resulted in the loss of employer-supported life cover. Overall, blacks and Hispanics / Hispanics were disproportionately affected by COVID-19.
September is the month of life insurance, and it now turns out to be a good time to get coverage. Insurance companies have made it easier to buy insurance during the pandemic. Many companies are temporarily waving medical examinations and streamlining the buying process with simplified insurance.
Companies with the strongest digital benefits benefit from a 30 percent increase to 50 percent in online insurance since January 2020, according to Deloitte. Consumers like to shop online and interest in agent-driven sales is declining, with only 41 percent of consumers saying they prefer to buy in person by 2020, a decrease from 64 percent in 2011.
People who get life insurance do not tend to regret it. In fact, LIMRA reports that nearly 40 percent said they wished they had bought it at a younger age. And while many believe that life insurance is too expensive, most people overestimate the cost. LIMRA found that 44 percent of Millennials believed that the cost of life insurance was more than $ 1,000 per year, when it is closer to $ 160 for a healthy 30-year-old to own a $ 250,000 life insurance policy.
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