Whats Causing The Rise In Life Insurance Apps?
Life insurance applications in the U.S. increased 2% in July, compared with the same period last year, after a slight downturn in June, according to data from MIB Group, Westwood, Mass.
The Medical Information Bureau Life Index for July 2002 says U.S. life insurance activity in the 60-and-over age group remained strong with a 7.2% increase, coming on the heels of Junes 6.5% increase.
Some in the industry believe this is a continuation of an increase in life activity immediately following 9/11.
The MIB life index for October 2001 showed an almost 9% increase in activity over October 2000, and a 26% increase over September 2001.
But, says Elaine Tumicki, assistant vice president, product and distribution research, LIMRA, Windsor, Conn., its impossible to ascribe the hike in applications to a reaction to 9/11 without explicitly asking what prompted the interest.
“There have been some increases in the second quarter this year from last year, but without asking why those policies were bought, its hard to say whether the slight hike is due to 9/11 or something else,” she says.
John Detwiler, marketing director, MIB, agrees that its “a stretch to say its related to 9/11 at this point.”
It was fairly easy to see that 9/11 caused people to “think of their mortality” and look into life insurance at a higher rate than typical shortly after 9/11, he says. But “whether thats driving the current phenomenon I couldnt say.”
The increase is more likely related to the taut economy, Detwiler speculates.
“Traditional wisdom says insurance tends to do better in a down economy”, he says.
In fact, the heightened interest in life insurance due to 9/11 was almost nonexistent by November and December, according to a survey by LIMRA.
Almost 20% of people surveyed in those months said they were less willing to meet with an agent or financial advisor after 9/11 and two-thirds of respondents said they felt no differently about meeting in light of the tragic events.