Premium volume for new health insurance policies increased 20 percent in 2021 compared to 2020, as Americans rushed to purchase policies during the Covid-19 pandemic.
According to Limra, an industry-funded research firm, the number of individual life insurance policies issued in 2021 rose 5 percent, which is the biggest year-over-year increase since the 1980s.
The firm is still calculating the exact number of policies, but said it is expected to hit 10 million. This number was last reached in 2016.
Back in 2020, about 9.83 million policies were sold, which was only up 1.7 percent from the previous year.
David Levenson, Limra’s chief executive, told the Wall Street Journal the numbers were no surprise, as the pandemic caused many to consider their own mortality in light of the millions who lost their lives — and the impact on their loved ones they would leave behind.
The firm said inflation wasn’t a factor in the higher revenue, but the increase instead was due to the larger average size of the policies.
Surveys and industry experts have shared that in the several years leading up to the pandemic, Americans were more focused on their savings, rather than dying prematurely.
This resulted in increased savings and 401K contributions instead of interest in insurance policies.
Additionally, Americans were relying on employer-provided life insurance policies. But when the pandemic hit, many people either lost these benefits or were afraid of losing it, so they bought their own policies, experts say.
Insurers and agents also struggled in 2020 with how to sell and write policies, experts say, due to the Covid stay-at-home orders and their inability to collect blood and urine samples.
One of the most popular policy choices in 2021 was the whole-life policy, according to Limra, which combines a death benefit with a savings component.
This policy allows tax-deferred savings to build over time, and offset rising insurance costs as the person ages. Growth for this policy increased by 27 percent in the fourth quarter.
Experts say that since the pandemic, many insurance companies have found alternative ways to meet requirements and automate underwriting, including the use of online platforms.
Experts expect continued interest and growth in certain life insurance policy types this year, especially due to online availability.
According to Levenson, three in 10 Americans told the company they are more likely to purchase coverage now due to Covid-19.