Policygenius Releases 2022 Life Insurance Trend Report

Policygenius, the one-stop platform for comparing and buying insurance, announced today the release of The 2022 Policygenius Life Insurance Trend Report.

This report focuses on major shifts in the life insurance industry, including significant growth in demand for no-medical-exam life insurance policies and strong insurance purchasing from people age 18-44. Overall, despite market volatility brought on by COVID-19 and a significant uptick in death claims, life insurance pricing remains stable.

This report draws on Policygenius' internal data as one of the largest term life insurance distribution platforms in the U.S., with more than $120 billion in face amount placed in force, as well as insights from other industry thought leaders.

Growth in no-medical-exam life insurance
The COVID-19 pandemic has accelerated changes in consumer shopping habits, with shoppers demanding convenience and more no-medical-exam policies that allow consumers to apply for term life insurance using digital health information. According to Kartik Sakthivel, vice president and chief information officer of the Life Insurance Market Research Administration (LIMRA), a not-for-profit trade organization, nine in 10 insurance executives surveyed in 2020 reported that their customers "have an increased appetite for the digital shopping experience," a trend that continued into 2021.

Internal Policygenius data corroborates this trend. From October to December 2021, roughly 56% of life insurance applications submitted through Policygenius were for no-medical-exam policies, compared to 26% in January to March 2021.

"To keep up with our customer demand, we went from having three no-medical-exam life insurance options in early 2020 to seven in 2021, with more on the horizon for 2022," Eloise Spinello, associate director of account management at Policygenius, said. "More insurers are adjusting to demand by offering no-medical-exam options that account for all health classes as well, rather than reserving these options for only the healthiest applicants."

In addition to providing convenience, accelerated underwriting policies can be more affordable options for shoppers. Policygenius Life Insurance Price Index data from the last year shows that no-medical-exam term insurance policies are competitively priced compared to term policies requiring a full medical exam — and some applicants even paid less for no-medical-exam term coverage. For example, 25-year-old females buying $250,000 in coverage paid 1.6% less in 2021 for no-medical-exam term policies than they did for traditional policies.

Demographic data shows strong demand from younger age groups

According to Mark Friedlander, director of corporate communications at the Insurance Information Institute, 2020 life insurance sales "were largely driven by younger age groups" and there was a year-over-year increase of 7.9% in life insurance sales for policyholders 44 and under from 2019 to 2020, the last year for which he has complete data.

In terms of the amount of coverage purchased through Policygenius in 2021, people 18-44 bought the vast majority (84%) of policies exceeding $1 million in coverage, and 81% of policies from $750,001 to $1 million. Older Gen Xers and Baby Boomers — people age 45 to 64 — bought only 16% of policies over $1 million in coverage, and those 65 and up didn't buy any of these policies.

Compared to other demographics, Gen Xers and Baby Boomers also bought less coverage overall through Policygenius in 2021: 85% of policies bought by people over 65 and 87% of the policies bought by people age 45 to 64 were for under $250,000.

Stability in life insurance pricing

The life insurance industry saw a significant increase in death claims due to COVID-19 in 2020. "Death benefits paid in 2020 jumped to $87.5 billion, up 15% from $76 billion in 2019, the largest increase in nearly 25 years," according to Friedlander.

One carrier on the Policygenius platform saw a similar rise in death claims in 2020 — and an even bigger increase in 2021. Legal & General America, the parent organization of the Banner Life and William Penn life insurance companies, saw a 12% increase in death claims, measured by dollars paid, from 2019 to 2020. Death claims rose again last year, increasing 17% from 2020 to 2021.

Despite this increase, as well as inflation, life insurance prices stayed consistent throughout 2021, with only nominal changes. Based on Policygenius data from April 2020 to April 2021, older smokers saw a surge in life insurance pricing, but pricing adjustments in May 2021 and the following months brought prices back to April 2020 levels. Consumers will likely continue to see price stability as insurers gather long-term data on COVID-19's impact on mortality rates.

"Unpredictable global events have made the past year challenging, but insurers have adapted quickly and there are still plenty of affordable options for consumers," Jennifer Fitzgerald, CEO and co-founder of Policygenius, said. "Since we founded Policygenius in 2014, we've seen significant technological advancements in the industry and we anticipate that securing financial protection will only become easier as insurers continue to embrace digitization."

To read the full Policygenius 2022 Life Insurance Trend Report, click here.

Methodology

Internal Policygenius data is based on the 10 major insurance companies offered through the Policygenius marketplace: AIG, Banner Life, Brighthouse, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, SBLI, and TransAmerica. Term life insurance prices are based on internal actuarial rate tables for the same 10 life insurance carriers.

No-medical-exam life insurance prices are based on internal actuarial rate tables from the seven major no-medical-exam life insurance carriers that offer policies through the Policygenius marketplace: Banner Life, Brighthouse, Lincoln Financial, Mutual of Omaha, Prudential, SBLI, and Transamerica.

Prices represent the average monthly life insurance premium for each sample customer profile for males and/or females ages 25 to 55 for term policies of $250,000 to $1 million. Monthly averages are based on products available through Policygenius for the indicated profile; rates for those products may vary by state, and not all products are available in all states. Individual rates may vary, depending on age, gender, state, health profile, and other eligibility criteria.

About Policygenius

Policygenius transforms the insurance journey for today's consumer, providing a one-stop platform where customers can compare options from top insurance carriers, get unbiased expert advice, buy policies, and manage their insurance portfolio, in one seamless, integrated experience. Our proprietary technology platform integrates with the leading life, disability, and home and auto insurance carriers and delivers an exceptional digital experience for both consumers and insurance carriers. Since 2014, our content, digital tools, and experts have served as a resource for millions of people on their insurance journey, and we have sold more than $150 billion in coverage.