Pandemic Motivates Younger Americans to Buy Life Insurance
Updated: Feb 20
Applications for life insurance policies soared 4% in 2020 in the U.S., the highest year over year annual growth rate since 2001, when Medical Information Bureau (MIB Group Inc.), began tracking activity. Deaths from Covid-19 encouraged many younger people who previously neglected buying life insurance to finally take action. Many Americans made purchases to replace or add to their employer provided coverage in the current state of the economy. “The silver lining of the year was that it did help people realize they need to prioritize planning for the worst days as well as the best days,” said Chantel Bonneau, a Northwestern Mutual financial adviser in San Diego.
The Industry’s sales g
rowth increased despite some life insurers turning away business by suspending sales of certain types of complicated policies. These decisions were linked to a march drop in already low interest rates.
· The Medical Information Bureau saw a 7.9% growth for applications in those under 45, compared to 3.8% increase for consumers 45-59.
· The younger policy holders were generally favoring term life, which provides a death benefit for a period of up to 30 years. A typical buyer from Lincoln National purchases a 20-year, $500,000 policy. Costing around $350 annually for a male in good health.
· Lincoln’s term life applications were up 25% year over year through September for buyers <40
· The final month of 2020 was the best December ever for New York Life, with a double-digit percentage increase in both number of life insurance policies sold and new sales premium.