Here are 5 questions that may shape our life and annuity coverage in 2021...

(Image: NIH; Chris Nicholls/ALM)

1. Will interest rates soar?

Conventional wisdom is that COVID-19 has wiped out borrowers' taste for loans, and that rates will stay low for years. Seems like a logical time for a rate hike jump scare.

(Credit: NASA)

2. What will COVID-19 do to mortality?

If the effects of the pandemic on the U.S. death rate persist, that could lead to higher prices and tough underwriting standards for life insurance and annuity death benefit guarantees, and lower prices for longevity-based individual and group annuity provisions.

3. What does President-elect Joe Biden think about his variable annuity?

Does he know he has it? Can his advisor meet him at the kitchen table, in the White House?

(Credit: Joe Biden/Youtube)

4. Will the new Secure Act multiple employer plan program help retail financial professionals break into the micro-employer retirement plan market?

The MEP market could be the hottest thing since the 401(k) plan, or something the Biden administration puts in the cellar.


5. Will the remaining providers of annuities with significant guarantees pick and choose among would-be buyers with regal disdain?

Today, annuity sellers have to work hard to attract consumers. In 2021, reduced issuer competition could turn the tables and make the annuity market a seller's market.

COVID-19 turned what looked as if it was going to be a pretty good, dull 2020 for U.S. life insurance and annuity issuers into a year of terror.

(Related: Is the World Functional Enough to Support Life Insurance?)

For five questions that may come up often when we’re covering the life and annuity sectors in 2021, see the slideshow below.

Here’s a review of the questions we proposed for the life and annuity markets for 2020, and how relevant those questions ended up being.

1. Is the world functional enough to support life insurance?

Value of Question: Excellent.

Answer: To be determined.

2. Wait, what’s “principles-based reserving”? We forget.

Value of Question: Incomplete.

Answer: COVID-19 distracted us, and we lost track of what’s happening with the effort to move life insurers to a new approach to establishing insurance reserves.

3. Will Ebola or some other disease lead to a spike in death claims?

Value of Question: Excellent.

Answer: Yes.

4. Will the return of estate taxes become for Democrats what the return of risk pool coverage for people with health problems is for the Republicans?

Value of Question: Satisfactory.

Answer: To be determined. But this does not seem to be the most interesting question that could be asked about the Democrats’ future financial services plans.

5. Will life insurers become the nation’s real wellness monitors?

Value of Question: Good.

Answer: Maybe. Many companies are still sending out press releases about wellness engagement.

— Read The Year 2020, for Agentson ThinkAdvisor.

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