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Covid-19 Pandemic Motivates Younger People to Buy Life Insurance
Applications for life insurance in the U.S. jumped 4% last year, mostly on demand from those under age 45
Consumers’ pandemic shopping lists went beyond baking flour and exercise equipment in 2020. They also bought more life insurance.
Applications for life-insurance policies jumped 4% in 2020 in the U.S., the highest year-over-year annual growth rate since 2001, when MIB Group Inc., a member-owned organization, began tracking activity.
With deaths from the coronavirus constantly in the news, many younger people who previously put off buying life insurance finally took action, agents and executives said. Americans made purchases to replace—or augment—employer-provided coverage in a weak economy.
One insurance buyer was Raicheen Blanks, 41 years old, a Connecticut resident who bought a term-life policy from Massachusetts Mutual Life Insurance Co.’s Haven Life online unit, with her husband as the beneficiary.
You never know what could happen; you may catch Covid-19 on the way to the grocery store,” she said. She has insurance through her finance-industry employer, but she worried, “God forbid, if I were laid off, I wouldn’t have it.”
A Jump in Life-InsuranceApplicationsMIB Life Index, change from a year earlierSource: MIB Life Index
%2011'15'20-4-2024
Some big insurers set their own records. New-sales premium topped $1 billion at Northwestern Mutual Life Insurance Co. for the first time, nearly an 8% increase over 2019.
“The silver lining of the year was that it did help people realize they need to prioritize planning
for the worst days as well as the best days,” said Chantel Bonneau, a Northwestern Mutual financial adviser in San Diego since 2010.
The industry’s sales growth occurred even as some life insurers turned away business by suspending sales of certain types of complicated policies. These moves were tied to a March drop in already-low U.S. interest rates. Life insurers earn much of their profit by investing customers’ premiums in bonds until claims come due.
Younger people drove the growth, MIB said. Applications were up 7.9% for those under age 45, compared with a 3.8% increase for consumers 45 to 59, and a small decline for those 60 and older.
MIB tracks applications, not final sales. Historically about 70% of applications end up in purchases, said MIB Chief Operating Officer Andrea Caruso.
Other industry data indicate strong sales did result, though 2020 figures aren’t available yet. Limra, an industry-funded research firm, said that purchases of term-life insurance, as measured by policy count, were up 7% through Sept. 30. Younger policyholders generally favor term life, which provides a death benefit for a period of up to about 30 years.
At Lincoln National Corp. LNC -0.15% , a top-10 seller of term-life policies, a typical buyer has been a 40-year-old man purchasing a 20-year, $500,000 policy, said Heather Milligan, head of underwriting. For a male in good health, that policy costs about $345 annually, Lincoln said.
Lincoln’s term-life applications were up 25% year-over-year through September for buyers 40 and under. Lincoln moved to an online application platform in 2016 for much of the term-life coverage it sells and was poised to take advantage of the Covid-19-related sales spurt, Ms. Milligan said.
Working in agents’ favor is that many buyers don’t need convincing. “They realize having life insurance is more of an urgent need than an item on a to-do list to take care of later,” said René Turner, a 35-year veteran of Primerica Inc.’s PRI +1.38% sales force.
When the virus began spreading widely, the industry’s outlook was anything but promising. Applications sank in March and April, MIB figures show.
In the face of stay-at-home directives and other challenges, some insurers relaxed requirements for blood and urine samples for the best policy prices. Some stepped up use of increasingly digitized medical records as a way to size up the health risk of applicants and skip fresh tests.
The final month of 2020 was the best December ever for 175-year-old New York Life Insurance Co., with double-digit percentage increases in both the number of life-insurance policies sold and new-sales premium.
To help agents find buyers when they couldn’t be out meeting people, New York Life created a series of virtual seminars, “The Power of Knowing,” with outside speakers on economic, personal-finance and other topics.
They proved so successful that “post-Covid it is going to be a principal part of our strategy,” said Mark Madgett, head of the company’s agency force.
Applications for life insurance in the U.S. jumped 4% last year, mostly on demand from those under age 45
Consumers’ pandemic shopping lists went beyond baking flour and exercise equipment in 2020. They also bought more life insurance.
Applications for life-insurance policies jumped 4% in 2020 in the U.S., the highest year-over-year annual growth rate since 2001, when MIB Group Inc., a member-owned organization, began tracking activity.
With deaths from the coronavirus constantly in the news, many younger people who previously put off buying life insurance finally took action, agents and executives said. Americans made purchases to replace—or augment—employer-provided coverage in a weak economy.
One insurance buyer was Raicheen Blanks, 41 years old, a Connecticut resident who bought a term-life policy from Massachusetts Mutual Life Insurance Co.’s Haven Life online unit, with her husband as the beneficiary.
You never know what could happen; you may catch Covid-19 on the way to the grocery store,” she said. She has insurance through her finance-industry employer, but she worried, “God forbid, if I were laid off, I wouldn’t have it.”
A Jump in Life-InsuranceApplicationsMIB Life Index, change from a year earlierSource: MIB Life Index
%2011'15'20-4-2024
Some big insurers set their own records. New-sales premium topped $1 billion at Northwestern Mutual Life Insurance Co. for the first time, nearly an 8% increase over 2019.
“The silver lining of the year was that it did help people realize they need to prioritize planning
for the worst days as well as the best days,” said Chantel Bonneau, a Northwestern Mutual financial adviser in San Diego since 2010.
The industry’s sales growth occurred even as some life insurers turned away business by suspending sales of certain types of complicated policies. These moves were tied to a March drop in already-low U.S. interest rates. Life insurers earn much of their profit by investing customers’ premiums in bonds until claims come due.
Younger people drove the growth, MIB said. Applications were up 7.9% for those under age 45, compared with a 3.8% increase for consumers 45 to 59, and a small decline for those 60 and older.
MIB tracks applications, not final sales. Historically about 70% of applications end up in purchases, said MIB Chief Operating Officer Andrea Caruso.
Other industry data indicate strong sales did result, though 2020 figures aren’t available yet. Limra, an industry-funded research firm, said that purchases of term-life insurance, as measured by policy count, were up 7% through Sept. 30. Younger policyholders generally favor term life, which provides a death benefit for a period of up to about 30 years.
At Lincoln National Corp. LNC -0.15% , a top-10 seller of term-life policies, a typical buyer has been a 40-year-old man purchasing a 20-year, $500,000 policy, said Heather Milligan, head of underwriting. For a male in good health, that policy costs about $345 annually, Lincoln said.
Lincoln’s term-life applications were up 25% year-over-year through September for buyers 40 and under. Lincoln moved to an online application platform in 2016 for much of the term-life coverage it sells and was poised to take advantage of the Covid-19-related sales spurt, Ms. Milligan said.
Working in agents’ favor is that many buyers don’t need convincing. “They realize having life insurance is more of an urgent need than an item on a to-do list to take care of later,” said René Turner, a 35-year veteran of Primerica Inc.’s PRI +1.38% sales force.
When the virus began spreading widely, the industry’s outlook was anything but promising. Applications sank in March and April, MIB figures show.
In the face of stay-at-home directives and other challenges, some insurers relaxed requirements for blood and urine samples for the best policy prices. Some stepped up use of increasingly digitized medical records as a way to size up the health risk of applicants and skip fresh tests.
The final month of 2020 was the best December ever for 175-year-old New York Life Insurance Co., with double-digit percentage increases in both the number of life-insurance policies sold and new-sales premium.
To help agents find buyers when they couldn’t be out meeting people, New York Life created a series of virtual seminars, “The Power of Knowing,” with outside speakers on economic, personal-finance and other topics.
They proved so successful that “post-Covid it is going to be a principal part of our strategy,” said Mark Madgett, head of the company’s agency force.
