For the first time in decades, after a long, steady climb upwards: life expectancy in the United States actually fell during the first year of the pandemic.
There were so many additional deaths attributable to COVID-19 that the average mortality age declined by a full 1.5 years. You read that right: the pandemic figuratively took more than a year off our lives. Life expectancy at birth – a projected statistic for the total population – fell from 78.8 years in 2019 to 77.3 in 2020.
The financial fallout of the pandemic, coupled with the mentally-paralyzing notion that we could die much sooner than expected, has led to a drastic increase in the popularity of life insurance. The 2021 Insurance Barometer Study, conducted by Life Happens and LIMRA financial services institute, reported some interesting numbers supporting this conclusion:
1.) 59% of people who don’t own life insurance now say they need it
2.) More than 30% of eligible consumers say they’re considering life insurance for the first time as a direct result of the pandemic
3.) Premiums are rising – a sign of sea change in the market. Increasing in some cases by as much as 20% from quarter-to-quarter.
4.) 42% of Americans would experience life-altering financial hardship within six months if a partner or primary earner were to die.
5.) 13% of eligible consumers purchased life insurance for the first time in 2020.
Life insurance customers are also getting younger. That same survey by LIMRA showed that 48% of Millennials said they planned to purchase life insurance coverage in the next year. Only time will tell if that projection is accurate – but it’s not entirely farfetched! Millennials had it especially rough during the pandemic.
For one, young workers faced higher unemployment rates throughout the pandemic. In many cases, this forced Millennials to purchase expensive supplemental insurance to make up for lost employer-sponsored policies. They were also the demographic most likely to have minor children at the onset of the pandemic, and the demographic with the highest amount of outstanding debt per capita. On top of that, serious behavioral differences emerged between different ethnicities. The consumers most likely to purchase life insurance in 2021 were of Hispanic descent, followed closely by Black Americans. This tracks, given the consistently-higher unemployment rates faced by minority Americans during 2020-21. In other words: while Millennials were statistically less likely to die from the virus itself, they stood to lose the most if they did. And minority Millennials were in an even more precarious position.
But I’m not presenting these statistics out of a desire to scare anyone.
On the contrary, I encourage you to strike while the iron is hot! If you’re a young person who recently began to consider purchasing life insurance, two straight years of chaos and upheaval in our insurance markets is starting to work in your favor. Sure, premiums are on the rise. But young people also tend to overestimate the costs drastically. In that same LIMRA survey mentioned earlier, participants were asked, Price-Is-Right-style, to guess the average annual cost of a term life insurance policy. A majority of participants overestimated the cost by more than 3x, and 44% of Millennials surveyed thought life insurance would cost them more than $1,000 a year.
Fact: in 2021, the average annual cost of a 20 year, $250,000 term life insurance policy was $160.
And on that note, it’s never been easier to shop around for life insurance! Many companies are temporarily waiving those notorious, invasive, in-person medical exams that typically stand in the way of getting a quote. And with in-person, agent-driven sales falling off a cliff in 2020, insurance companies finally began to adapt to the digital marketplace that Millennials have preferred for years. And, since they comprise such a large portion of their market, you’d be hard-pressed to find an insurer who hasn’t hopped on this bandwagon.
I’ll finish with one final statistic from that LIMRA survey: 39% of all participants surveyed stated they wished they had bought their life insurance at a younger age.
The last few years have taught us, through painful experience, not to take life for granted. If there are people who love you – people who depend on you – ensure their future by getting insured.
