02.03.21

Pandemic Motivates Younger People to Buy Life Insurance

by: Leslie Scism

Applications for life-insurance policies jumped 4 percent in 2020 in the United States, the highest year-over-year annual growth rate since 2001, when MIB Group Inc. began tracking activity. 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 percent for those under age 45, compared with a 3.8 percent increase for consumers 45 to 59, and a small decline for those 60 and older. MIB tracks applications, not final sales. Historically about 70 percent 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 said that purchases of term-life insurance, as measured by policy count, were up 7 percent through Sept. 30.

Read the full article on Wall Street Journal.