The COVID-19 pandemic has taken a dramatic toll on the life insurance market. Between safe-at-home orders and changes to the underwriting process, policy sales have had dropped over recent weeks.
According to MIB Group, overall application activity for April was off -5.5% compared to March. This marks the second consecutive month to see a decrease in activity. The report shows the biggest decline came from older consumers (aged 60+). Younger buyers (aged 44 and younger) were the least impacted by the pandemic.
The year-over-year changes for April are as follows:
- 0 – 44: -0.7%
- 45 – 59: -2.4%
- 60+: -9.7%
The generational differences shown above reveal one possible reason for the current state of the market. Younger people – Millennials and Gen-Xers – are more comfortable with, and are more likely to, go online to purchase life insurance. With most states under some form of shelter-in-place order, in-person appointments are not an option right now.
This does not mean that you cannot connect with clients and write business. You just need to take a different approach. Many agents have moved their operations online. Video conferencing, e-Apps, and digital quoting options have become the new norm now that business has shifted to a virtual environment.
This is obviously fine for younger consumers, who tend to be more tech savvy. But it can present a challenge when it comes to connecting with clients in the 60+ age group. However, this isn’t the only obstacle many are facing when it comes to purchasing life insurance.
Another potential reason for the drop has to do with the underwriting changes enacted since the pandemic hit. Some carriers have been denying coverage for people considered to be in the high-risk category.
Other changes affecting the market include:
- New age thresholds for policy issue
- New restrictions and guidance on health statements
- More scrutiny on travel and other factors
While this can be a much harder obstacle to overcome, it isn’t impossible. At IAMS, we work with several carriers who are accepting new business from those in the 60+ age range, and other hard to place cases. To help you help your clients, we are offering an exclusive package of life resources that includes a health screening questionnaire and life insurance fact finder. For more on these resources, click here.
We are living in unprecedented times. The ever-changing situation surrounding the COVID-19 pandemic has left all of us scrambling to adapt. However, these are also times when financial security and protection are of the upmost importance. Your clients need you and we are here to help you serve them.