Americans Buying More Insurance During the Pandemic

March 3, 2021

Sometimes it takes a major life event to recognize the importance of insurance. For many Americans, the Coronavirus pandemic has prompted them to view life insurance in a whole new light.

Survey Spotlights Rising Focus on Life Insurance

Life Happens conducted a survey in June 2020. It found that:

  • 67% of Americans reported that the pandemic has been a wake-up call to assess their financial situations, and
  • 30% of Americans noted that life insurance has become a new topic of discussion in their households.

New Applications Trending Up

Realizing the heightened focus now on insurance, insurance companies are doing their part to help Americans gain the financial protection they need today and in the future. Many are instituting no medical exam policies in response to the broader use of virtual meetings and telehealth appointments, as well as the trend toward digitization. By eliminating the in-person medical exam requirement, more individuals are opting to purchase insurance now. Individual carriers have reported increases in insurance applications ranging from 15% to a high of 34%. Within certain demographics, new life insurance applications were particularly pronounced. For example, for consumers under 44 years of age group, there was a 13% increase in life insurance applications in the third quarter of 2020 over Q3 2019 figures. This compares with the 9% increase for those within the 45 to 59 years of age group.

Criteria to Consider When Purchasing Life Insurance

To make a sound life insurance purchase, carefully consider the following criteria:

  • Your age – The younger you are when you purchase life insurance, the lower the cost and higher the value.
  • Your gender – With life spans of approximately seven years longer than males, females have the benefit of lower costing policies. This may start to change as data suggests this life expectancy gap has begun to close.
  • Your health – Healthier individuals pay less for insurance than those with health conditions and/or bad health habits such as smoking.
  • Your coverage needs – If you have none, the consideration is to purchase insurance based on your financial situation, your income, your dependents and how much would be needed to pay for your final expenses and debts. If you currently have some coverage, consider how that policy might be amended to gain additional coverage or perhaps it should be replaced with a new policy. This latter option should be weighed very carefully as replacing a policy could come with heavy costs.
  • The timeframe you anticipate requiring the coverage – In evaluating the period for coverage, consider factors such as: age of children and for homeowners, your mortgage balance which would have to be covered in the event of your death.

An experienced insurance professional can provide information and guidance to ensure that the right life insurance purchase is made. There is also a lot of good information on insurance company websites and the websites of industry associations such as the Insurance Information Institute (https://www.iii.org/).