Aside from the pandemic being pushed to the margins, research firm Limra noted the cut from discretionary spending amid rising inflation as another significant reason for fewer applications.
ThinkAdvisor also reported that pandemic-related deaths slumped from 158,000 in Q1 to 30,000 in Q2, which has contributed to the waning sense of urgency among the public to obtain a life insurance policy. Still, an estimated 2,800 people die from the pandemic every week, comparable to the weekly death toll from strokes.
“The headlines totally do impact sales,” Andrea Caruso, chief operating officer at MIB, told The Wall Street Journal. “If things aren’t front and center, people don’t think of them immediately.”
It doesn’t help that a lot of prominent life insurers – including Prudential Financial Inc. – quit new sales of guaranteed universal life in mid-2020, which promises that the annual premium bill won’t increase during the policyholder’s lifetime.
Guaranteed policies were likely cut because low rates were widespread during the pandemic. According to The Wall Street Journal, life insurers earn considerable profit by investing customer premiums in bonds.
