Young Consumers Shun Life Market: MIB

Many young Americans turned their backs on the U.S. individual life insurance market in November. The number of U.S. residents ages 44 and younger who applied for coverage in last month was 9.4% lower than in November 2017, according to new data from MIB Group Inc. The drop in November follows a 7.3% year-over-year drop for the 44-and-under age group in October (Related: Look Who Applied for Life Insurance in October) MIB is a nonprofit group that helps life insurers see whether applicants are telling different life insurance companies different stories. The group's analysts use MIB application-screening figures to create a life insurance application activity indicator. The activity level fell sharply, for the second month in a row, as the activity level for people ages 45 to 59 drifted low, and as  the activity level for people ages 60 and older rose sharply. In November, activity for consumers ages 45 to 59 fell 2.4%. That compares with a year-over-year drop of 0.7% in October. Activity for consumers ages 60 and older climbed 8.3%. In October, the year-over activity for older consumers climbed 8.3%.

Reasons

MIB did not propose a reason for the dramatic decrease in application activity for young consumers, or the dramatic increase for people in the 60-and-older age group. One possible explanation is that changes in underwriting standards, growing awareness of the life settlement market, and growing awareness that life insurance can be used in long-term care planning is increasing older consumers' level of interest in life insurance. Another possible explanation is that some of the same insurance agents who sell life insurance to young people throughout most of the year may focus more on selling health insurance in  the fall. The 2019 annual enrollment period for Medicare Advantage plans and Medicare Part D prescription drug plans started Oct. 15 and ended Friday. The 2019 open enrollment period for individual major medical insurance started Nov. 1 in most of the country and is set to end Saturday in most of the country. — Read ACA Public Exchanges Lurch Back Open, on ThinkAdvisor. — Connect with ThinkAdvisor Life/Health on LinkedIn and Twitter.