U.S. Life Application Activity Soars
Americans ages 71 and older were especially hungry for policies with more than $5 million in death benefits.
Older high-net-worth clients might be starting to pay more attention to the estate tax exemption possibly falling from $27.22 million today to about half that on Jan. 1, 2026.
For U.S. residents 71 and older, individual life insurance application activity was about 19% higher in July than it was in July 2023, according to MIB.
Applicants in the 71-and-up age group were especially hungry for the kind of policies that could be used in high-end estate planning: Their shopping activity for policies with death benefits over $5 million increased more than 100% from the year-earlier level.
Overall activity increased 9.3%.
MIB is an organization that helps life insurers share some of the information used in the life insurance underwriting process. It bases monthly life application activity reports on the volume of policies flowing through its policy-checking systems.
What it means: Whether Congress keeps the current federal estate tax exemption from sunsetting could depend on whether Democrats control the White House, the Senate and the House in 2025 or whether Republicans do so.
One possibility is that older consumers’ interest in big life insurance policies could be a sign that they are watching the general election campaign news and thinking that the odds that the current exemption will sunset have increased.
Another possibility is that increased competition in the life settlement market could be educating older consumers about the marketability of life insurance policies owned by older consumers.
Age breakouts: Here’s what happened to activity for each age group between July 2023 and the latest month:
- Ages 0-30: +8.7%
- Ages 31-40: +9.4%
- Ages 51-60: +6.0%
- Ages 61-70: +10.2%
- Ages 71 and older: +18.8%
Coverage costs: Policygenius, a web broker, creates monthly price charts based on the prices that term life issuers offer its customers.
The lowest price is for a 25-year-old female nonsmoker who needs $250,000 in death benefits.
The highest price reported both in 2023 and 2024 is for a 55-year-old male smoker who needs $1 million in coverage.
For August, the cost for the young, female nonsmoker with just $250,000 in coverage fell to $14.44, from $14.59 a year earlier.
The cost for a 55-year-old male smoker with a $1 million policy increased to $1,006.89, from $1,006.82.
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