U.S. individual life insurance application activity fell 2.6% in September, but the picture differed based on the size of the policies.
MIB Group, the organization that compiles the monthly life application activity index reports, says application volume for policies providing up to $250,000 in coverage was more than 10% lower than in September 2022.
Activity increased for policies providing $250,000 to $1 million in coverage, and it increased by more than 10% for policies providing more than $1 million in coverage.
Application activity trends looked much stronger for clients up to age 50 than for older clients, and stronger for universal life than for term life or whole life.
In August, overall MIB application activity was 1.8% higher than in August 2022.
What it means: If application activity trends for big universal life policies for people up to age 50 are strong, that could mean that more relatively high-income clients are trying to use cash-value life policies to save for long-term goals, or to create inflation-resistant rainy day funds.
Drops for older applicants could be a sign of life insurers increasing prices, tightening underwriting standards or changing marketing strategies.
The index provider: MIB is a Braintree, Massachusetts-based organization that helps life insurers share some of the data used in the underwriting process, and it bases the index reports on the number of applications that member companies feed through its systems.
Data by age: These are year-over-year activity change figures that MIB recorded for applicants' age groups in September:
- Ages 0-30: +0.5%
- Ages 31-50: +1.0%
- Ages 51-60: -8.3%
- Ages 61-70: -10.4%
- Ages 71 and older: -5.7%
Prices: A web broker, Policygenius, posts a monthly term life price index based on the prices offered by the insurers it represents.
The prices in the index tables range from the average monthly premiums for a 25-year-old female nonsmoker who needs $250,000 in death benefits up to the average monthly premiums for a 55-year-old male smoker who needs $1 million in death benefits.
This month, the cost for the 25-year-old female nonsmoker seeking $250,000 in coverage was $14.59. That's 2.7% higher than the price she would have paid in October 2022.
The cost for the 55-year-old male smoker seeking $1 million in coverage fell 0.5%, to $1,006.88.
Credit: Adobe Stock
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.