Both January and February saw increases in applications for life insurance in the United States. As the American financial scene has been looking good, it seems that consumers are thinking about the future and feeling prepared to start investing in life coverage.
The interesting part of this month’s report is that the youngest group, those aged 0-44 years old, increased the most, particularly in the month of February. As expected, those over 60 were the other largest group, but it is a fascinating trend to see Millennials as the number one life insurance applicants.
Breakdown of the Numbers
The end of 2019 saw a slight downturn in life insurance applications. After a 6% surge in November, December had a 3.3% decrease in applications. The 0-44 demographics was down more than that, at 4.2%. But in January, the numbers bounced back to a 2.5% overall increase, followed by a 5.6% increase in February.
In 2020, the youngest applicants make up approximately 54% of the index, which is hardly a normal breakdown. The 0-44 bracket was tied with the 60+ bracket at 3.4% increase in January and exceeded them with a 7% to 6.4% increase in February. So, while the index itself is swelling, it is clear that the Millennials are the ones driving the rapid growth. This trend has been growing for some time, with the youngest demographic taking a larger share of the pie, and the total index increasing at the extremes for a few years, but this is the starkest contrast seen in some time.
Typically, older consumers will purchase life insurance in anticipation of declining health and increased age while the younger group will put it off until that time. Perhaps this is a generational difference, as the 45 to 59-year-old group is more or less holding steady, increasing at a much slower rate (.1% in January, 2.6% in February).
Possible Explanations
Of course, any explanations of this trend are speculative at this point. With the Coronavirus galloping through the news at this time, it would be easy to attribute viral fear to the trend, but the panic will not be reflected likely until at least the end of March 2020.
It could be nothing more interesting than a booming economy, with folks having more discretionary income to use on what is frequently the last item on the list. A younger populace savvier with the Internet and thereby with greater access to information could see the value of life insurance more than their predecessors at a similar age, but it is difficult to say. It could be that by the end of March or April the trend will have died down, but in the meantime it has analysts and insurers very interested.
Sources:
https://www.mibgroup.com/riskanalytics/life_index_pr.html
https://www.thinkadvisor.com/2019/12/09/younger-consumers-applied-for-life-insurance-mib/