Life insurance applications by Americans have surged in 2020 as the pandemic has made people more aware of their mortality.
According to new research by MIB Group, a data-sharing service for insurance companies, the application activity has grown almost twice as fast this year for Americans 44 years and younger. The research conducted in September 2020 found that younger buyers are often first-time applicants and first want to understand how life insurance works.
Many of them are still beginning their financial experiences in life. Jobs, homes, cities and relationships will likely change over the next decade, which means needs and dependencies may change too.
Industry group and NGO Life Happens CEO Faisa Stafford said, “The question of who needs life insurance is very personal. An easy way to know if you need life insurance is to consider if someone would suffer financially if you were to die. If the answer is yes, then you should consider life insurance.”
She said the prospective buyers should focus on two main issues - replacing income and repaying debts - if you die. That means thinking ahead to cover your growing financial commitments as your life changes.
In a growing practice called ‘accelerated underwriting’, many insurers now rely on prescription drug use, personal data from MIB Group and electronic health records to speed up the process.
Research by the life insurance trade group LIMRA shows that half of millennials overestimate the cost of coverage. Only 52% own life insurance even though 80% recognise they need it.
The COVID-19 pandemic has provided a new motivation. In October, nearly one in three millennials said they feel an increased need for life insurance due to COVID-19 according to consumer research from LIMRA.