COVID-19 has made so many people feel vulnerable to contracting the virus, leading them to think about their mortality and “what if” scenarios. Recent data gathered by the Life Insurance Marketing and Research Association (LIMRA), shows that COVID-19 has significantly affected consumer perspectives about life insurance and has bolstered life insurance sales. In fact, six in 10 consumers in 2021 said that because of the pandemic, they now have a heightened awareness about the value of life insurance, and 31% said they were more likely to buy coverage.
Sales trends/issues on deck for 2022
According to LIMRA and as reported by InsuranceNewsNet Magazine, life insurance sales are smashing records and policy purchases are up by double-digit growth. As more consumers turn to the protection of life insurance and insurers respond to changes brought on by the pandemic, the industry is seeing a number of sales and consumer trends. The following are highlights from the LIMRA report.
- Growth in a wide range of life product options and policy versatility has prompted younger people to convert their COVID-19 concerns into a life insurance contract.
- This year, premium increases and restrictions are likely to increase as insurers try to reduce risks brought about by the pandemic.
- Indexed universal life (IUL) remains a top seller — up 24% in the second quarter of 2021 compared with the prior year. This year, annual premium growth for IULs is forecast to increase by another 6%. Term life insurance sales are also trending up, primarily through direct-to-consumer channels.
- The likelihood of buying life insurance due to the pandemic is higher for millennials (45%), Black Americans (38%), men (33%), and those making over $150,000 per year (42%).
- Of people who tested positive for COVID-19, 42% said they are more likely to purchase life insurance.
- Recent speculation that at some point in the future insurers might require a COVID-19 vaccination as part of underwriting has not come to fruition.
- Last year’s pandemic relief bill (IRS Rule 7702) has allowed consumers to put more money into their permanent life insurance policies. However, more money means a lower policy face value. This has resulted in producers receiving lower commissions, unless insurers are willing to restructure how they compensate their agents. It also has carriers repricing products.
“People are buying life insurance not to replace an existing policy but because they’re suddenly concerned about mortality. They’re recognizing the importance of life insurance and how it can protect their families.” — Elaine Tumicki, vice president for insurance product research for LIMRA.
As time goes on, it is uncertain if this steep upward trend in life insurance sales will continue. What is certain is that as we move closer toward a post-pandemic world, life insurance will always be there to help consumers secure the protection and peace of mind they need – especially in these uncertain times. As an insurance professional, now is a good time to educate your clients about the many life insurance products and options available, answer questions and to personally walk them through the application process. You can read the full LIMRA report by clicking here.
Need to complete your life and health insurance continuing education credits? FastrackCE can help you save time and money by getting all your life, health, and property and casualty continuing education credits in one place and on your schedule.