What You Need to Know
- The number of individual life claims was only 11% higher than usual for people ages 90 and older in the fourth quarter.
- For people ages 50 through 59, the number was 21% higher than normal.
- For people under 50, the number was 29% higher than normal.
The COVID-19 pandemic is continuing to devastate the kinds of people who are especially likely to have advisors: U.S. residents with individual life insurance.
For all U.S. residents with fully underwritten life insurance, the number of claims increased 19% above the 2017-2019 average in the third quarter of 2021, and 18% in the fourth quarter, according to new life industry data compiled by the Individual Life COVID-19 Project Work Group.
The total individual life insurance claim amount reported increased 54% above the 2017-2019 average in the third quarter and 35% in the fourth quarter.
What It Means
Your clients might like to think that the COVID-19 pandemic is over.
But from the perspective of an advisor trying to help a client with life insurance and retirement income planning, the pandemic is still raging.
A client may need extra help with protecting loved ones against the risk of the client’s premature death.
The client may also need disability insurance or other arrangements to prepare for the risk of suffering loss of ability to work due to COVID-19.
A client who gets through the pandemic without incident may be very healthy and have an above-average need for planning for the possibility of living past age 100.
The new life insurance claim analysis comes from the Individual Life COVID-19 Project Work Group.
The work group includes LIMRA, the Reinsurance Group of America, the Society of Actuaries Research Institute and Tindall Associates.
The work group received life claims data from 32 issuers of fully underwritten individual life insurance for the period from 2016 through 2021.
The claim reports covered about 72% of individual life insurance in force in the United States.