Exploring how a global virus forever changed our perceptions of protection.
No one saw the coronavirus pandemic coming. And none of us expected it to hit as hard as it did. With such an unexpected global health threat placed at our feet, it was no wonder that there was an uptick in the purchase of life insurance policies during covid. But purchasing patterns weren’t the only thing that changed — the way life insurance got bought and sold shifted too. Read on as we explore these changes.
The Wyshbox Blog
- Increase in customers under 45
- Underwriting changes
- Flexible coverage
- Getting a plan is a good idea
Increase in customers under 45
It will come as no real surprise that once the pandemic took hold of the world, life insurance sign-ups experienced a popularity surge. According to a CNBC report last fall, all the leading insurance companies saw an uptick in customers. Northwestern Mutual, the country’s largest insurance seller, reported a 15% increase, while marketplaces like Policygenius and Accuquote saw traffic and sales grow between 30%-50%.
Some studies have considered this surge as panic buying, while we like to think of it as younger people becoming more self-aware of their mortality. Many experts agree and believe this is not just a trend because of scary stats. Understanding the need for protection is now present in everyone’s mind.
Lockdown and social distancing also played a big role in changing things. Because customers could no longer meet in person with financial advisors, insurance agents, or doctors, companies had to change how they gathered and evaluated our info (the process known as underwriting).
Pre-covid, you would most likely sit down with an advisor and enjoy a long Q&A interview with q’s such as “how old are you?” to “has anyone in your family had cancer lately?” to “how’s your driving record?” Etc. The advisor would then package up all these answers and send them over to the insurance company’s underwriter. Meanwhile, you would probably also need to visit with a physician who would give you a health check to look for any existing conditions that were not already addressed. This info would also go to the insurance company who would eventually send a quote your way. So yeah, It could be a fairly long and arduous process…
Fast forward to 2020 where our face-to-face meetings with advisors and doctors dropped to nill. Some companies already had online forms for gathering your data, and others scrambled to put the process into place. In addition, insurers focused on new ways to underwrite customers that did not involve a doctor’s visit. Technology to the rescue!
Now, while the shelter-in-place orders have relaxed since the height of things, the changes that were put into place can definitely be looked at as positives. In fact, a lot of companies who were already heading in a more digital direction before all this hit were given a strong kick to move things faster.
In addition to changes in the underwriting process, we also saw an increased need for more flexible plans and coverage. Because the economic market became so shaky, the unemployment rate skyrocketed during covid. Everyone was trying to be as responsible as possible with their money so they were looking for monthly costs they could cut. Life insurance policies came under scrutiny and people wondered if they really needed to pay for all the coverage they had. Life insurance companies recognized that need and started to more actively help customers adjust their policies to fit their needs and budgets and decrease monthly costs.
Nowadays, it’s looking like the option of flexible coverage is a change that will stay. Many insurers are getting very serious about new and more flexible policies that can grow (and shrink) with your life. This type of flexibility will not only be convenient but could also save customers some good money over time.
Getting a plan is a good idea
Covid definitely did a lot of harm to our world, but if there is a silver lining it’s that it was a catalyst for improvements in the life insurance industry.
And although we’re all feeling at least a bit less worried about the future, having life insurance is a smart decision no matter what’s happening in the world. The fact is that having a plan with the appropriate coverage for you and your family will always provide a cushion for your loved ones left behind. While illness and death are not always preventable, financial disasters can be.