2021 OUTLOOK FOR LIFE INSURANCE BUYERS

One of the silver linings of the pandemic is that it has prompted a lot of people to tackle some financial responsibility that they have been putting off, such as acquiring personal life insurance.

It is widely known that a lot of people bought life insurance for the first time because of the threat of the coronavirus. As applications for insurance policies rose this year, life insurance companies had to adapt to meet the growing demand at a time when there was a challenge to doing business as usual. 

This is why insurance companies were forced to rely more on technology rather than face-to-face interactions. As a result, the process of acquiring insurance became faster and easier for consumers. However,  some consumers have faced more hurdles in getting life insurance as a result of the pandemic.

Even though the advances that have been made in the industry will continue to benefit consumers going forward, the challenges to getting coverage will also continue. Here’s what buying life insurance in 2021 may look like.

Having Peace of mind

Having life insurance can easily put you at ease because it will make sure that your family will not suffer financially in case of your death. Having peace of mind that if ever you get positive for coronavirus, you will not be at risk for serious problems in terms of finances later on. 

You’re confident that you can deal with unexpected expenses in case of accidents and medical emergencies especially with the underlying threat of Covid lurking around the corner,  nor do you have to worry about your family’s financial security, allowing them to live the life you always imagined for them. 

People with a Lower COVID-19 Risk were given lower rates

Last March 2020, the entire world was grappling with the enormity and danger of the coronavirus pandemic. Its effects rippled into other markets, including the life insurance markets. Life insurance prices did rise, on average, during the summer of 2020.

However,  some insurers started reducing rates in the fall for applicants who face a lower mortality risk for COVID-19. Those applicants include younger adults who don’t smoke and don’t have any health conditions that have been linked to an increased risk of dying from the virus.

No more medical exams

One of the biggest challenges that insurers had to adapt early in the pandemic was not being able to conduct in-person life insurance medical exams as part of the life insurance underwriting process.

This caused a growing number of insurers to stop relying so heavily on medical exams and had been using a process called accelerated underwriting. This involves data modeling in order to predict an applicant’s life expectancy and provide a life insurance quote. Since the pandemic began, more companies have adopted this accelerated underwriting, and those that had been using it improved upon the process.

COVID-Related Restrictions

Yes, most life insurance companies no longer have medical exams. However, most life insurance companies also responded to the pandemic by putting restrictions on applicants. For example, some insurers placed restrictions on applications from an older adults.