Preneed

Policygenius says “Life insurance prices continue to be stable”

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Life insurance rates, at least for the time being, are holding stable regardless of the excess deaths due to Covid-19 in 2020.  A recent press release from Policygenius, that you can access here, says that “The May index shows life insurance pricing stability, despite an increase in the U.S. death rate evident in data recently released by the Center for Disease Control”.

Policygenius, in their release state that “the U.S. death rate increased by nearly 16% from 2019 to 2020 with Covid-19 being the third leading cause of death according to the CDC”.  In spite of those numbers, Policygenius also states that insurers have not adjusted pricing in response thus far.  In fact, Policygenius states that the most significant premium change from April to May was for 55-year-old female smokers who actually saw a small decrease in average premiums.

According to the press release, the prices included in the Policygenius Life Insurance Price Index are base on internal actuarial rate tables for 11 of the life insurance carriers that offer policies through the Policygenius marketplace.

The CDC data quoted above can be found here.  The CDC analyzed provisional National Vital Statistic System (NVSS) death certificate data for deaths during 2020.   It is the first provisional data released and includes the following 2020 information:

  • Approximately 3,358,814 deaths occurred in the United States
  • The age adjusted death rate increased in total by 15.9% over 2019
  • 2020 saw 828.7 deaths per 100,000 people whereas the 2019 number was 715.2 deaths per 100,000 people
  • The highest overall numbers of deaths occurred during the week ending December 26, 2020 (80,656) and during the week ending April 11, 2020 (78,917)
  • Covid-19 was listed as an underlying or contributing cause of death for 377,883 deaths. . . .ranking it third among causes of deaths in the United States. (about 11.3% of all deaths)
  • The #1 cause of death in the United States during 2020 was listed as Heart Disease and responsible for over 690,000 deaths. (about 20.5% of all deaths)
  • The #2 cause of death in the United States during 2020 was listed as Cancer and was responsible for over 598,000 deaths. (about 17.8% of all deaths)

Note:  This is provisional data from the CDC.

Funeral Director Daily take:  I find this information fascinating.  Since last March or April (2020) it has somewhat been a guessing game on how the health care and mortality costs of Covid-19, something that we as consumers (and our insurers)  didn’t even know about when we purchased our health insurance for 2020, would shake out.

I serve on boards (Home Health Care, Hospice, and Hospital) where health care insurance expenses or government programs provide the revenue for our businesses.  Insurance companies and government agencies such as Medicare have paid the bills as presented, albeit with some nuances for charges due to the hospitalizations of Covid-19 patients.

However, it was not really business as usual because these companies are generally actuarily “solid”, but that was difficult to be in 2020 when a disease we had never heard about hit our shores.

In my opinion, it is still too early to tell, but I wonder if health insurance rates and mortality rates in life (and preneed) insurance will be adjusted in the future because of the coronavirus experience that we have went through.

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