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Life insurance buyers kept insurers busy in 2021. An industry-funded financial services research firm, LIMRA, reported record sales in the second quarter and then again in the third quarter that it has not seen since 2007.
Life insurance sales growth increased 18% in the first three quarters of 2021, and sales increased across all types of life insurance policies.
What can life insurance buyers expect in 2022? Here’s a look at some of the trends that will shape the life insurance landscape for the next year.
The Covid pandemic was undoubtedly an important driver of higher life insurance sales. When people were looking for financial security and worried about their own mortality, they saw life insurance as a solution.
With the Omicron virus variant disrupting the return to normal, 2022 could very well be another stellar year for life insurance sales. Almost every third consumer (31%) says, according to a survey by LIMRA, that they are more likely to buy insurance coverage due to the pandemic.
When the pandemic finally falls in the rearview mirror, the life insurance spending frenzy will likely begin to cool off.
“Based on historical data from the 1918 pandemic, when sales rose significantly for several years after the outbreak, we believe the effects of Covid-19 will continue to move people to consider life insurance when planning their financial future “Says John Carroll. Senior Vice President and Head of Insurance at LIMRA. “But realistically, the further the thoughts of the pandemic get removed, the more consumer demand will wane.”
Fortunately for life insurance buyers, Covid has not led to rising prices for term life insurance. Policygenius’ life insurance price index has shown no significant price changes from January 2021 to date, and only very small changes over the course of the year.
“The biggest price change we saw was for 25-year-old women smokers who bought $ 1 million in insurance – their rates dropped 4.24% from January through December,” said Jennifer Fitzgerald, CEO and co-founder of Policygenius. “I assume that term life insurance rates will remain stable in 2022. In 2021, most of our life insurance carriers have adjusted their prices on a regular basis in order to stay competitive in the market share. “
Exam-free life insurance is more competitive in terms of price
As a result of the pandemic, exam-free life insurance options became available faster than usual. It was a necessity at a time when no one wanted strangers to come into their homes for life insurance medical exams. And insurers are getting better at pricing without using medical research data.
“We see that a fast, exam-free policy used to normally mean potential insured parties had to pay more, but now there are exam-free options that are competitive compared to the much longer drive-arounds for a full health exam,” notes Chirag Pancholi, CEO of Jenny Life. Jenny Life is one of the top exam free life insurance companies in the Forbes Advisor reviews.
If you want to avoid both a long application process and a medical exam for life insurance as a priority, then you have more options in 2022 than in the years before, especially if you are young and healthy. It’s always a good idea to compare offers between multiple providers.
It is easier to buy life insurance
The expanded selection of exam-free life insurance is just one way in which it is becoming easier to take out life insurance. The pandemic has also spurred faster delivery of amenities that were already in the works.
“Consumer expectations have evolved and insurance companies will continue to adapt to their needs, enabling simpler and more efficient purchasing, support and claims processes,” said Wade Harrison, senior vice president and president of the Protection Division, Protective. Protective is one of the top life insurance companies in Forbes Advisor’s life insurance reviews.
“While much of this trend was in the works before the pandemic, it definitely accelerated the digitization initiative,” says Harrison.
Look out for these benefits when buying life insurance in 2022, says Carroll of LIMRA:
- Video conference for a meeting with your insurance agent or financial advisor
- Online applications
- Electronic signatures and electronic authentication to speed up approval times
- Electronic delivery of policy documents
The big resignation creates more need for life insurance
As the “great resignation” persists and workers voluntarily (and often happily) quit their jobs, the need for people to have their own life insurance grows. Group life insurance through employment usually ends when you leave employment.
“You will need life insurance in the open market outside of work-related benefits,” says Pancholi of Jenny Life. “We are seeing an increasing number of women leaving the workforce to start businesses, become self-employed, and stay at home to run their homes. Each of these elements requires and will generate greater demand for life insurance. “
Life insurance needs go beyond workplace benefits
Life insurance buyers have turned to not only individual life insurance but also workplace life insurance during the pandemic. Whit Corman, spokesman for the American Council of Life Insurers, reports that group life insurance purchases rose 16.1% to $ 1.4 trillion in 2020.
Even if you got life insurance through your workplace, 2022 could be a good year to strengthen your life insurance base.
“The important lesson for consumers here is that group policy coverage is fine for some people but not for many others,” says Cornman. “Group policies typically offer workers one or two times their salary coverage,” which is way below most people’s real life insurance needs.
The need for life insurance for women is growing
“Even before the pandemic, the proportion of women with life insurance protection was declining,” observes Carroll from LIMRA. “Today only 47% of women are insured compared to 58% of men. This is the fifth year in a row that women’s life insurance ownership has decreased. “
Carroll says about 14% of women (more than 18 million) lost their life insurance coverage in 2020, with more than a third (36%) saying this was due to an unplanned job loss.
And many women had to quit their jobs to meet family needs during the pandemic, such as school children taking their home lessons on video.
“They had to change their careers to play an even bigger role in their household,” says Pancholi, and that “has tremendous economic value.” The high cost of “replacing” a stay-at-home mother’s services creates a life insurance need for those who do not earn a paycheck.
“The perception that life insurance is only for breadwinners is changing and there is a trend to recognize the soft and intangible economic value of mothers for their household (cook, housekeeper, CFO, chauffeur, consultant, detective, judge, janitor, teacher , Event). Planner), ”says Pancholi.
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