Interest in Life Insurance Grows as Applications Increase
The number of people 71 and older buying universal life insurance continues to rise in the United States. According to an activity report from MIB Group, the individual life insurance application volume went up by 11.7% from April 2020 to April 2021. Life insurance application activity also experienced an increase of 18.5% in March 2021.
MIB Group is an organization that works with insurers throughout the United States and Canada by providing information for life insurance underwriting. All of these life insurance policy application statistics are based on the number of life insurers in the system. Application volume is similar to policy sales, but it also has a few differences. For example, life insurers may turn an applicant down, or a consumer may decide not to pay for the available coverage, whether it's universal or whole life insurance.
Seniors Returning to Whole Life and Universal Life Insurance
MIB Group offers detailed information for members and provides summary data for the public. These summaries are broken down into five age groups, as the oldest is for consumers at 71 years of age or older. Initially, the application activity for consumers aged 71 and older fell each month from November 2020 through February 2021.
One possible reason is the impact of COVID-19 on the sales process for insurers. Many of these insurers focused on selling coverage over the phone and the internet instead of face-to-face meetings. Another reason for the decline is that insurers tightened life insurance underwriting rules due to the pandemic. However, these obstacles have eased, as application activity for consumers at 71 and older grew faster than any of the other age groups.
Here is an overview of the age-group activity numbers for April 2021:
Ages 0-30: 15.4% Increase
Ages 31-50: 6.1% Increase
Ages 51-60: 10.4% Increase
Ages 61-70: 15% Increase
Ages 71 and Older: 20.4% Increase
Application activity involving universal life insurance was extreme for consumers at age 71 and older.
Overall, application activity for term life remained steady for most age groups, increasing or declining by less than 3.5%. On the other hand, whole life insurance and universal life insurance increase by at least 10% or greater.
Policygenius Price Index
Policygenius is an insurance web broker that creates term life price index reports each month by using the price data from the different insurers that use the website.
The lowest price is $14.23 per month for a 25-year-old nonsmoker female needing $250,000 in coverage, down two cents from the lowest rate in the tables from early April.
The most expensive rate is $1,043.16 per month for a 55-year-old male smoker needing $1 million in life insurance coverage, which is two cents higher than in April.
The ratio between the highest and lowest premiums in the table continued to remain steady at 73.2.
Understanding the demand for whole life vs. universal life insurance is important for underwriting life insurance policies. An increase in application activity for whole life insurance and universal life insurance will most likely continue to rise. All of this data from each group daily helps to understand better the demand for whole life insurance and universal life insurance.