Americans Bought Up Life Insurance Throughout the Pandemic
2021’s Big Numbers
As COVID-19 case numbers rose and people lost their lives to the disease, Americans started buying up life insurance. The number of life insurance policies sold last year rose by 5% from 2020 — the largest single-year increase since the 1980s.
The final numbers for the year are still being calculated, but around 10 million policies were sold. That total was last exceeded in 2016. Researchers explain with around a million deaths attributed to the coronavirus, it’s not surprising people would begin to consider their own mortality and how their loss would affect loved ones.
Understand the Options
The life insurance industry made some adjustments in response to the pandemic. Some providers require blood or urine samples when forecasting the timing of a potential policyholder’s death, but many companies eased those requirements during lockdowns. Digital medical records are becoming increasingly important in this respect as well.
Some who bought life insurance in 2021 opted for a whole-life policy, which allows tax-deferred savings to build up and help offset premium costs over time. Others chose term life insurance, which only applies for a set number of years. This is often designed to cover a family’s primary expenses like mortgages and tuition bills in the event of someone’s death.
Three Keys to Follow
Like any investment or financial decision, deciding whether to buy life insurance and choosing the right policy is an involved process. Advisors say while the cost or premium you pay for the policy is important, it shouldn’t be the only consideration. Some consumer affairs groups have expressed concerns over certain types of policies, and insurance companies receive ratings as well.
You should be prepared to answer a few questions during the life insurance application process. At first you’ll get a quote from a life insurer, which is an estimate. It’s extremely important to answer honestly when you apply, or else you could be declined coverage.
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