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Life Health > Life Insurance > Permanent Life Insurance

Life Application Activity Loses COVID-Era Luster

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What You Need to Know

  • The overall individual life activity level was 6% lower in June than in June 2021.
  • For consumers ages 71 and older, activity increased 5.4%
  • Year-to-date activity still looks good when compared with the first half of 2019.

Your clients’ purchases of life insurance policies may now look more like they did before the COVID-19 pandemic started.

Consumers filed 6% fewer applications for individual life insurance in June than they filed in June 2021, according to MIB Group’s new U.S. application activity report.

But activity was strong earlier in the year, and overall activity for the first half appears to be comparable to what it was in the first half of 2019, when no one had heard of COVID-19.

Although overall application activity was down in June, the application submission rate for consumers ages 71 and older increased, as it has most of the year.

What It Means

High-income and high-net-worth clients ages 71 and older may be using permanent life policies to fund estate plans, long-term care plans or retirement income planning arrangements.

The high MIB application level for consumers in that oldest age group may be a sign of ferment in the wealth planning market.

One sign that this is the case is that MIB is reporting 2.8% year-to-date growth in the amount of coverage sought by women asking for $5 million or more in death benefits. Other women — and men in all face amount categories — asked for less coverage, on average, than in the first half of 2021.

MIB

MIB — a Braintree, Massachusetts-based consortium — provides systems that life insurers can use to share information for life insurance applicant underwriting purposes.

The group uses its own application-checking volume data to create the application activity index. The MIB activity index has been affected dramatically by the start of the COVID-19 pandemic, in early 2020.

The pandemic initially hurt application activity by disrupting the in-person meetings that many insurance agents and brokers had used to take in applications, but pent-up life insurance buying pressure and increased consumer awareness of mortality risk led to increased activity.

The Details

Here are the activity change figures, broken down by age group, for June:

  • Ages zero-30: -6.8%
  • Ages 31-50: -6.6%
  • Ages 51-60: -7.0%
  • Ages 61-70: -6.0%
  • Ages 71 and older: +5.4%

The Policygenius Price Index

Policygenius has been using pricing information for the 20-year, level-premium term life policies it sells online to provide a monthly term life price index.

The cheapest coverage included is for a 25-year-old female nonsmoker who needs $250,000 in death benefits, and the most expensive is for a 55-year-old male smoker who needs $1 million in death benefits.

This month, the lowest price in the Policygenius price tables, for the 25-year-old female nonsmoker seeking just $250,000 in coverage, fell to $14.13, from $14.21 in June.

The highest price, for the 55-year-old male smoker seeking $1 million in coverage, held steady at $1,016.10.

(Image: Shutterstock)