A COVID-19-driven life insurance buying spree has ended, with sales activity falling back nearly to prepandemic levels, according to new data from two industry research firms, the Wall Street Journal reported. Applications for life-insurance policies fell 6.5% year to date through mid-August, compared with the same period in 2021. They are down 1.5% in that period compared with 2020, when fear about the coronavirus began translating into increased shopping for policies, according to MIB Group Inc., an organization that tracks applications for life insurers. Application volume year-to-date through mid-August is up 2% compared with the same period in 2019, meaning that the industry hasn’t given back all of its sales momentum, said MIB Chief Operating Officer Andrea Caruso. Historically, about 70% of applications end up in purchases. Changes made during COVID-19 could keep sales up, the industry hopes. During the pandemic, many carriers expanded online and other direct-to-consumer options. Some relaxed requirements for blood and urine samples, and some stepped up use of digital medical records as a way to size up the health risk of applicants and avoid ordering new in-person tests. Still, a sales rebound will face obstacles besides people’s procrastination. Among them: Since mid-2020, some prominent life insurers have either entirely quit selling a highly popular type of policy known as “guaranteed universal life.” Such policies promise that the annual premium bill won’t increase during the owner’s lifetime. That means the insurer is on the hook for any miscalculations it makes in its original pricing. In other types of universal life, consumers bear the risk of premium increases.
