3 Positive Ways COVID-19 Has Impacted the Life Insurance Industry

The uptick in online life insurance searches and applications since the pandemic began suggests that COVID-19 has more people thinking about their mortality. As a result, many Americans are considering the importance of life insurance and no longer putting off purchasing this vital coverage. With all the bad news about COVID-19, the following are three positive ways the pandemic has impacted the life insurance industry.

1. More people are thinking about and applying for coverage. According to the MIB Group, an insurance data sharing service, Google searches for life insurance jumped 50% from March to May 2020, compared with the same period in 2019. Moreover, U.S. individual life application activity was 3.7% higher in December 2020 than in December 2019, with the number of applications from individuals under the age of 44 increasing by 7%. Overall, there was a 4% increase in life insurance applications — the largest full-year increase since 2011.

2. The volume of online applications has increased. The insurance industry may have been a slow adopter of technology, but since the pandemic began, the industry has seen more applications moving online. According to MSN Money, as the volume of life insurance applications picked up early in the pandemic, many brokers pressed carriers who were holdouts regarding digital life insurance tools to consider online technologies that would streamline the application process — more specifically, the adoption of electronic signatures.

3. No-exam life insurance has become a more sought-after alternative. The pandemic has prompted more individuals to apply for life insurance policies that don’t require having to undergo a lengthy application process or medical exam. By simply answering a few medical questions, these no-exam or guaranteed life insurance policies will allow individuals to secure coverage in an expedited manner — albeit at a higher rate and typically with lower face amounts. Since the start of the pandemic, Forbes Advisor notes that many life insurers are recognizing the appeal of these types of policies and learning how to adapt and expand their no-exam policy offerings with rates that are more comparable to standard contracts.

And finally, because many life insurance agents/brokers also serve their clients with other life-related products and financial services, another positive is that more consumers aren’t putting wills and trusts on the back burner. In fact, according to a recent article published by CNBC, since the pandemic began, there has and continues to be a sharp spike in individuals rushing to establish wills, trusts and end-of-life directives. CNBC goes on to report that a survey conducted by LegalZoom.com indicates that 32% of people ages 18 to 24 have already drafted their wills and another 21% have begun the paperwork because they know someone who became ill or died from the virus.

Conclusion

These are challenging times for the insurance industry as a whole. But the good news is, despite COVID-19, life insurance remains readily available and the industry doesn’t foresee carriers pulling out of the market anytime soon. As an insurance professional, you can confidently assure clients who already own a life insurance policy that insurers remain financially strong and that COVID-19 will have no effect on their policy’s payout in the event of a virus-related death, provided their policy.

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