Final Expense Life Premium Revenue Rises 10%: Life Insurers Council
Preneed life premium revenue was 10% lower in 2020 than in 2019.
Life insurers generated more final expense life insurance premium revenue in 2020 but less preneed life insurance premium revenue, according to the Life Insurers Council.
The council says total final expense life premium increased 9% between 2019 and 2020, to $480 million.
Preneed life insurance premium revenue fell 10%, to $1.4 billion.
Because of the COVID-19 pandemic, new final expense sales were especially weak in March 2020 and April 2020, and new preneed insurance sales were down sharply in April 2020, the council says.
The Life Insurers Council, which serves small and midsize life insurers, is an arm of LOMA, which, in turn, is part of LL Global.
The Survey
Final expense insurance is life insurance that families can use to cover the cost of funerals, burials, medical bills and other end-of-life expenses.
Life insurers distribute most of this type of coverage through independent marketing organizations, or IMOs.
Nineteen final expense issuers participated in both the 2019 and 2020 surveys, and five more participated only in 2020.
The 24 final expense life insurers that reported on their 2020 results sold a combined total of about 662,000 policies.
Preneed arrangements are supported by life insurance policies and annuities that funeral homes sell directly to people who are planning in advance for their funerals.
The Life Insurers Council received data on preneed life sales from 14 issuers, including 13 issuers that also reported on their preneed life performance in 2019.
What Happened
Jeffrey Shaw, the Life Insurers Council executive director, said sales of final expense and preneed products fell as companies began to comply with strict social distancing guidelines and improve as conditions began to recover.
In the final expense market, for example, many insurers moved quickly to increase use of electronic application systems or call centers.
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