Thankful that life insurance rates are still down

In COVID-19 is sure to kill you, but life insurance rates haven’t changed (August 21, 2021), I cited a December 2020 study of life insurance rates from 100 different companies. COVID-19 was killing so many healthy folks in their prime that the insurance companies hadn’t bothered to raise rates.

It’s been almost a year. Vaccines are available for the faithful. Every day we read about an unvaccinated person getting his/her/zir/their just deserts, gasping for breath and then dying on a ventilator in an overcrowded ICU.

What’s happening in the life insurance market? As Phil Connors found out in Groundhog Day, it is easy to talk to life insurance agents. I chatted with one outside Loxahatchee Ice Cream Company and learned that rates remain about the same or slightly lower than in 2019. Business was good. Consistent with “Your Vaccination Status Won’t Affect What You Pay for Life Insurance — for Now” (Money), the agent said that carriers were not interested in whether an applicant for insurance had been or would be vaccinated.

The second agent with whom I chatted was at the Stuart Air Show. He agreed that rates were flat-to-down compared to 2019, but his business had changed dramatically. “It used to be difficult to get people to focus on a plan,” he said, “but people have been sitting at home with plenty of time on their hands. It’s easy to get them on the phone and easy to sell them policies.” None of his carriers are interested in COVID-19 vaccination status (i.e., the elixir that we’re constantly reminded will determine whether we live or die is of no interest to the folks who have to pay $500,000 in the event that we die).

So… if we believe that life insurance actuaries are competent at their jobs and correctly pricing risk, we should be grateful that, despite the deaths we read about in the media, the world has not, in fact, become more lethal.

Speaking of the air show, here are some folks on whom I would not be in a hurry to write a policy (12 cylinders, 1,500 horsepower, 75+ years old; what could go wrong?):


10 thoughts on “Thankful that life insurance rates are still down

  1. This is a situation in which more details would help.

    Is it possible that rates have been kept flat because the insurance policies include certain exceptions that would void the policies, such as dying from COVID specifically?

    Is it possible that maybe COVID (and the associated lock-down-induced weight gain) would drive up insurance rates, but these increases are then offset by the fact that most people were staying home during the lock downs? It’s difficult for people to die in car accidents, plane crashes, cruise ship sinkings, armed robberies, bear attacks, and etc., if they are staying home all the time…

    • Bob: Given that hospitals have a financial incentive to code COVID as a cause of death (see ), excluding COVID deaths, including for policies already issued, would have been the first order of business at PhilipLifeCo! Sadly for PhilipLifeCo’s plans to make infinite profits by excluding all fatal diseases, it seems that state laws do not allow such exclusions. See for example: “Can a life insurance company change terms and conditions of an existing life insurance policy to avoid paying the death benefit if death is due to COVID-19? No. New York Law does not permit life insurance exclusions based on death due to disease or illness.”

      Insurance regulation is state-by-state (unclear why it should be; why does the U.S. need 50+ insurance regulation bureaucracies?), so it is conceivable that there is some state in which it would be possible to put a COVID-19 exclusion into the fine print.

  2. I wonder if the professional actuaries don’t think they can trust the mortality data (cause of death) so they’re just going on the basic death rate and it’s not much different? One would think that life insurance companies would have – ironclad – the absolute best information about cause of death when they have to settle a claim. It’s fascinating and more investigation is needed, but I’m glad to hear it because I’ve been thinking about taking out a policy recently.

    • Separately, the P-51 Mustang is one of those rare airplanes that looks almost as good inverted as it does right-side-up, and flies almost as well. It’s just so bada**. Reminds me of a Moto Guzzi, except sleeker.

      If I had a P-51 Mustang, I’d also have a Moto Guzzi V85TT. In fact I would settle for the Moto Guzzi. Anyone want to donate to my GoFundMe account?

  3. I knew a USAF general who was a WWII P-51 pilot. He said the worst of it was cold feet all the time. Unpressurized for hours at 30,000 ft will do that.

    • ” as vaccinated individuals are now nearly 3x more likely to die than the unvaccinated”
      Startling statistics. Who would think that 40 – 100+ age group is 3 times more likely to die then 0 – 18 age group? I thought that older adults were a lot more likely to die then youngsters.

  4. More people seeking insurance – so demand is higher and insurance overall profits improve. Given that insurance market is competitive it would rather absolve some minimal margin loss due to coronavirus (usually people buy life insurance while in their 30th or 40th, rates for older adults are too high, and insurance expires before people enter highest coronavirus risk age anyway) than loose overall profits to competitor

  5. Whatever happens, insurance companies will be bailed out. Another 10 trillion here and there cannot hurt. In Biden Economics, stimulus and bailout packages reduce inflation!

    It seems almost quaint now that Trump’s original reparation proposal for the Wuhan Virus was only 10 trillion.

  6. Life insurance for COVIDFear doesn’t go up, cool, but you have to pay extra to get terrorist insurance coverage for your home and business? Interesting.

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