The U.S. term life market looked stable during the first eight month of the COVID-19 pandemic, three economists report.
The number of term life products offered to U.S. consumers over 75 fell by 13.6 percentage points, when compared with the number of term life products offered to young consumers, and issuers pulled some of the cheapest term life products off the market, the economists write in a new working paper published on the National Bureau of Economic Research website.
But, for the most part, “there is no evidence that COVID-19 caused differential increases in premiums for the old relative to the young,” the economists conclude.
- A copy of the pandemic life insurance effects paper is available here.
- An article about COVID-19 and an economist’s retirement policy ideas is available here.
A working paper is a research paper that has not yet gone through a fully peer review process.
Timothy Harris, an assistant professor of economics at Illinois State University, and two colleagues — Charles Courtemanche and Aaron Yelowitz of the University of Kentucky — based their analysis on a pool of about 800,000 policies, from 95 separate issuers, that are listed on Compulife, a life insurance quote service.
The economists looked at policies with terms ranging from 1 year to 30 years. They did not look at permanent life insurance products, such as universal life policies.
The economists say the prices older purchasers paid for term life policies seemed to increase just a little more than what younger purchasers paid, even though COVID-19 has been much more dangerous to older people than to younger people.