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Life Health > Life Insurance

10 Ways COVID-19 Is Affecting the Life and Annuity Distribution World

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The people in the life and annuity sales and distribution community are facing the same COVID-19 pandemic challenges everyone else is facing: looking for pasta, getting used to working at home every day, and wondering whether that scratchy throat is just a scratchy throat or… a symptom.

They’re also continuing to work to get other people protection against risks of disability, death and outliving retirement savings.

(Related: How RIAs, Other Firms Are Stepping Up During Crisis)

Here are 10 things people in the sales and distribution community are saying about the current, and future, effects of the pandemic, drawn from written commentaries emailed to us, emailed to clients, or distributed through press release services.

1. Consumer interest in life insurance is strong.

Phil Murphy, vice president of insurance at Ethos, a company that sells life insurance online, said in an email that Ethos is seeing spikes in life insurance applications submitted.

“This virus has people thinking about their mortality, and life insurance is increasingly top of mind now,” Murphy said.

2. Consumer questions about the impact on life insurers’ financial strength are out there.

Murphy said he believes that, at this point, economic issues and non-COVID-19 underwriting issues, such as opioid use and distracted driving, appear to be a greater concern for life insurers than SARS-CoV-2, the virus that causes COVID-19.

“Nonetheless, the industry is prepared should claims rise,” Murphy said. “Many companies model and plan for the impact of potential pandemics and adjust their balance sheets accordingly. Regulations require companies to hold significant reserves to manage any claims volatility, and the impact is further mitigated by reinsurers backing up carriers’ claims by taking on a portion of the risk. Ethos looks for financial strength and prudent risk management in all our partners. This allows our customers to be confident that their loved ones are protected.”

3. Scheduling underwriting exams can be more complicated.

Byron Udell, the chief executive officer of, a web broker, said in commentary sent out through that his firm has been getting questions from consumers about whether anything about applying for life insurance has changed due to the COVID-19 pandemic.

“What is now becoming a greater challenge are required off-site medical exams for approval with some life insurance policies,” Udell said.

ExamOne, a Quest Diagnostics unit that handles testing for many life insurers, has posted information for insurers about the effects of the pandemic on the paramedical exams used to assess the health of applicants for fully underwritten life insurance and disability insurance policies.

ExamOne is not collecting specimens from people under investigation for having the SARS-CoV-2 virus, or having a confirmed case of COVID-19, the company says.

When scheduling paramedical exam appointments, the company asks the insurance applicants whether they’ve had a fever or respiratory distress within the past 14 days, taken a cruise, or traveled to a restricted travel area.

The company has closed the exam offices in San Francisco and nearby communities in San Francisco, because of COVID-19-related lockdown requirements in those communities.

The ExamOne exam teams in New Jersey and Pennsylvania face COVID-19-related 8 p.m. curfews.

4. Underwriting seems to be changing, some.

Murphy said he sees more life underwriter interest in whether applicants have traveled to areas known for having many COVID-19 cases.

Udell said he believes little is known about how insurance companies will manage underwriting decisions surrounding COVID-19, but that he expects to see a greater focus on questions about foreign travel.

“Life insurance companies have always asked about recent or planned foreign travel to various regions that may be considered hotspots, and that has always been an underwriting factor,” Udell said. “This is similar. You can figure that if you’ve recently returned from one of the places in the world that are COVID-19 hot-spots, one might expect most of the insurance companies to postpone underwriting your application for, say, 30 days.”

Meanwhile, “while some companies have updated their underwriting guidelines, the good news is that they are continuing to issue coverage for those consumers who are interested in obtaining life insurance,” Udell said.

5. Life distributors and issuers may need to work harder to understand each other.

Seixas “Chad” Milner III, the chairman of the National Association of Independent Life Brokerage Agencies, said in an email to NAILBA members that his organization has tried to gain clarity on upcoming interaction by reaching out to most of the insurers that work with independent brokerage distribution organizations.

NAILBA has posted the responses on its website.

Some insurers have not yet provided formal responses, but some have responded with statements that describe, for example, how the companies will handle travel to China in life insurance underwriting, what the companies are doing about their own employees’ travel, and what kinds of digital tools the companies can use to communicate when meeting face-to-face is impossible.

6. Life distributors may be having a harder time communicating with the retail producers.

Milner noted in his letter to NAILBA members that many insurance marketing organization meetings, agency events, and industry conferences have been canceled, postponed or turned into online events.

At this point, NAILBA is still expecting to hold its annual meeting starting Nov. 18 in Hollywood, Florida, Milner wrote.

Milner suggested that one solution might be for some life distributors to make their events part of the NAILBA meeting.

“We are in the business of relationship building and management,” Milner wrote. “While several online options can assist during these difficult times, face to face meetings in a clean environment remains an utmost necessity.”

7. Falling interest rates may be creating a short, one-time increase in product sales.

The Federal Reserve Board has tried to lower the interest rates it controls in an effort to help businesses and investors get through COVID-19-related lockdowns, quarantines and supply disruption.

Many life insurers are responding by increasing prices for interest-sensitive prices, pruning benefits, or ending product sales.

The life insurers have set some of the product change dates a few weeks in the future. That means that some consumers who act quickly may still be able to get products with the old, more attractive prices and terms.

8. Increased use of COVID-19-related “shelter in place” orders and curfews may be favoring organizations that can operate without in-person meetings.

Ethos, for example, can underwrite life insurance using a system that relies on access to digital data sources, not paramedical exams.

“The insurtech/online way of processing applications is better positioned to respond to this uptick in interest compared to traditional providers, since customers don’t need to leave their home to get coverage,” Murphy said. “There’s no need to meet with live agents or to visit a doctor, or have someone come to your house.”

But the current situation is also forcing distributors and retail producers to polish virtual meeting details.

Allianz Life, for example, has sent its sales representatives a guide talking about the rules that apply to sales of indexed annuities through virtual meetings.

Reps can sell indexed annuities through Skype or similar services, but a rep has to verify a client’s identity using a picture ID, the company says.

“Producers must view the client and their valid, legible, and unexpired government-issued picture information, verify their identity through the videoconference, and record the information in the Customer Identification Verification section of the Financial Professional’s Report,” according to the Allianz Life guide. “The applicant’s ID must be matched to the face of the individual during the video call.”

9. The current situation may be giving agents a good opportunity to talk to consumers about the value of insurance, and of agents.

Nicholas Mancuso, a life insurance specialist at Policygenius, said in an emailed comment that agents can help answer many common consumer questions about the COVID-19 pandemic, such as whether life policies protect the insureds against pandemic viruses, and how the current travel restrictions might affect someone’s life insurance application.

Paying a death claim related a pandemic is just one of the many ways life insurance policies can pay out and protect families, Mancuso said.

Mancuso is telling consumers that, even in an outbreak, they should still aim to get the right amount of coverage for the right amount of time.

“An experienced agent can help you navigate the application process as the situation evolves,” Mancuso said.

10. Life insurance community players are trying to do their part to persuade people to take experts’ advice seriously.

Udell, at AccuQuote, is encouraging consumers to read an article about the importance of protecting older people and people with health problems from COVID-19, and of keeping the flow of severe COVID-19 infections down to a level that hospitals can handle.

“We strive to protect families every day in our line of work,” Udell said. “If there are elderly or at-risk folks in your area, of course, they should do everything possible to avoid contact with infection. So, check on them, and make sure they know how to stay safe. The measures being taken nationwide now are being implemented in order to ‘flatten out the infection curve’ and ease the strain on our already inundated health care system.”

— Read Aflac Describes Covid-19 Risk Management Effortson ThinkAdvisor.

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© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.