COVID-19 did not impact the life insurance industry the way some were expecting, but it did result in the highest ever number of payments to beneficiaries.
In 2020, more than $90 billion in life insurance benefits were paid out, a 15.4% increase over 2019, and it’s the most significant increase since the 1918 influenza pandemic.
Insurance companies paid out more than ever before, but they were also busy with new business. In response to fears of the pandemic, people bought a record $3.3 trillion in life insurance policies last year.
The total life insurance coverage in the United States reached $20.4 trillion last year. It could have been a lot worse for life insurance companies.
Many older people have been victims of COVID-19 because their insurance policies are typically smaller.
COVID-19 may have resulted in approximately 377,883 deaths in the United States in 2020, according to CDC estimates. The majority of these deaths among the elderly are expected to be caused by COVID-19. Despite this, it is unclear how many senior citizens have life insurance policies.
In response to the Delta variant, there has been a change in demographics as well. Since the advent of that mutation, the number of deaths among those over 65 has declined to 69% of the total, while those ages 45 to 64 have experienced an increase.
It is estimated that Omicron, in its early stages, is four times more transmissible than Delta.
COVID deaths for 2021 have already surpassed the number during the year 2020, which could mean another record year for the insurance industry concerning payouts.