Trendspotting: Pandemic Breathes New Life Into Life Insurance

10/27/20 07:00AM EDT

NewsWire: 20/27/20

  • After dwindling for years, sales of life insurance have surged during the pandemic. The double-digit increase in sales is being driven by younger adults, who are mostly opting for term life insurance. (CNBC)
    • NH: The Covid-19 pandemic has Americans considering their mortality more than ever before. What’s one way to cope with these worries? Buy life insurance.
    • Prior to the pandemic, insurance sales had been declining for years. But when Covid-19 cases began to soar, so did interest in insurance. Between March and May this year, Google searches for “life insurance” jumped 50% compared to the same period in 2019. 
    • Sales followed suit. At Northwestern Mutual, the nation’s biggest seller of life insurance, they’ve increased 15% compared to last year. At Haven Life, which is owned by MassMutual, they’re up 34%. At online seller AccuQuote, they’re up 30%. At Bestow, a Texas-based startup, sales are five times what they were last year. The sales frenzy has been helped, no doubt, by a big marketing push. The number of life insurance ads on air shot up 77% from July to August this year.
    • So who is it that’s buying all these policies? Not who you might think. The biggest source of interest has been Millennials. In Q3 2020, the number of life insurance applications among adults under age 44 rose 13% compared to the same time last year. Among 45- to 59-year-olds, it rose 9%; among those 60+, it rose just 0.4%. 
    • This trend might seem surprising given that young people are at the lowest risk of dying from Covid-19. But it tracks Millennials’ broader risk aversion, which can be seen in everything from how they feel about employee benefits to how they approach investing. (See “Millennials Value Life Insurance.”) Previous surveys have shown that young adults are even more worried about contracting Covid-19 than those over 65 and, as well, that they tend to overestimate their risk of dying. To them, life insurance just seems like a sensible way to protect their families and loved ones during a time of major uncertainty.
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