Older Consumers Flock to Cash-Value Life Policies

News December 11, 2023 at 02:17 PM
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Older consumers' interest in cash-value life policies helped keep U.S. life insurance application activity stable in November, MIB Group says.

Overall activity was just 0.1% higher than in November 2022, but activity for consumers climbed 11.6%, year-over-year.

For consumers ages 71 and older, application activity increased by more than 10% for universal life insurance, which builds cash value.

Application activity for consumers ages 71 and older was strongest for coverage amounts ranging from $1 to $500,000 and from $1 million to $2.5 million. Activity for amounts over $5 million fell more than 10%.

What it means: The MIB figures suggest that ordinary mortality planning, retirement planning and long-term care planning needs shaped older consumers' application trends in November.

If ultra-high-net-worth clients were rushing to protect themselves against the possibility of a big estate tax increase in 2026, application activity for coverage amounts over $5 million would have been stronger.

MIB: MIB is a Braintree, Massachusetts-based group that helps life insurers share some of the information used to assess coverage applications.

It bases its life insurance market activity reports on its own application-processing volume.

Data by age: Here's how U.S. life application activity changed between November 2022 and November 2023, broken out by age group:

  • Ages 0-30: -2.7%
  • Ages 31-50: -2.1%
  • Ages 51:60: -4.5%
  • Ages 61-70: +0.6%
  • Ages 71 and older: +11.6%

Coverage costs: Policygenius, a web broker, uses its own term life providers' prices to create monthly price index tables.

The lowest price is for a 25-year-old female nonsmoker who needs $250,000 in death benefits. This month, that is $14.58, up from $14.19 in December 2022.

The highest price is for a 55-year-old male smoker who needs $1 million in death benefits. That cost fell to $1,006.88, from $1,011.93.

Credit:  Fabio/Adobe Stock

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