Life Insurance Global Market Report 2021: COVID-19 Impact

In March 2020, the entire world was grappling with the enormity of the coronavirus pandemic. Large portions of the population were staying at home and only venturing out for essential needs. Its effects rippled into other businesses including life insurance markets. While coronavirus has had a huge impact on the insurance industry as a whole, the life insurance sector has been left relatively unscathed. There has been no evidence of life insurers pulling out of the market, premiums have remained steady, and COVID- related claims are already being paid. 

COVID-19 came as a threat to humankind and people were left with no choice other than to get locked down in their homes. The outbreak of the pandemic took a toll on other people’s lives and that is why the demand for life insurance policies has been on an increase during this period. People are planning for the worst that may happen and life insurance comes as a first choice when it comes to protecting the family financially in case a person is gone. 

Applying for life insurance during the coronavirus outbreak

Alongside other emergency preparedness methods, life insurance is an important risk management tool to consider. Barring any major changes wherein the coronavirus has a larger impact on people who are applying for a life insurance policy than those who already have a policy in place.  If you were to contract the coronavirus and it caused long-term health problems before you applied for life insurance, you might end up receiving a lower health classification and a costlier life insurance policy. 

Has COVID-19 made it harder to get a new life insurance policy?

If you’ve been infected with the coronavirus or have recently traveled to a region with a heavy outbreak, applying for life insurance could take longer and much more expensive. More recently, some insurers have stopped selling policies to customers older than a certain age. Terms and rates may change as life insurance providers continue adjusting to the situation. 

However, the situation has made life insurance easier to obtain having no exams. Some companies announce that they removed the requirement for an on-site medical exam because social distancing policies and business shutdowns have made such exams impractical. 

What steps have life insurance companies taken in response to the coronavirus?

Several companies have signaled that they are willing to defer premium payments, for the time being, some companies offered a 90 day grace period for customers who couldn’t make premium payments at the time. Some companies allow premium holders to leverage their current life insurance benefits to help pay their monthly premium. Which also allows a family member or loved one to make a payment in your place. 

Was there an increase in prices?

A study explored the reaction of life insurance markets this October 2020 in 95 distinct companies. Overall, the analysis of the study showed that life insurance companies generally did not respond to the changes in mortality by increasing premiums or reducing policy offerings for those who experienced the greatest change in mortality risk. However, most companies increased premiums for policies offered to older individuals.