Life insurance payouts hit record 100BILLION last year — up by a quarter from 2019
- Due to Covid-19 deaths, payouts have risen by double digits in the past two years.
- The leap in death benefit payouts from 2019 to 2021 was 27%
- Year-over-year increases since 2019 rival payouts made during the 1918 influenza pandemic
In 2021, the death benefits paid by US life insurance companies topped $100 billion. This is a 27% increase over 2019.
Death benefit payouts have seen a rise in recent pandemic deaths. Covid has killed more than a million people. However, the true death rate from the pandemic is expected to be much higher because of non-Covid causes like drug overdoses and delays in crucial medical care.
Payouts grew by 11 per cent in 2021 to $100.19 billion, According According to the American Council of Life Insurers. The most recent spike follows a similar 15 percent increase year-over–year in 2020.
Since 2019, when insurers paid approximately $78 billion, this rate has risen yearly.
ACLI didn’t disclose any reasons for deaths. They believe that the pandemic is responsible.
Life insurance policies protect spouses, children, and their families from the potentially catastrophic economic damage that could be caused by the unexpected passing of a loved one.
The US has recorded the largest increase in life insurance payouts since the influenza pandemic in 1918, when payments surged 41%.
Myrna Guerrero, a national sales director for major life insurance company Primerica Inc. said: ‘Obviously, we won’t take the pain away of losing somebody, but financially they will be OK.’
Most Americans have life insurance policies as part of their workplace benefits. Many people also purchase individual plans that they are not affiliated with their employer. 52% of Americans have a life insurance policy.
Andrew Melnyk, ACLI Vice President, Research & Chief Economist said: ‘For the second year in a row, life insurance benefit payments increased by double-digit percentages. Life insurance companies have risen to the occasion, while still paying record-high amounts of annuity benefits. This is typically paid to retirees.
‘It is a testament to life insurers’ ability to prepare for any eventuality and deliver on their promises to consumers at all times.’
The pandemic pandemic payments have increased year over year by 41%, compared to the payouts during the 1918 flu pandemic.
Life insurers are also seeing a jump in claims that they think are tied to delays in seeking medical care as a result of lockdowns in 2020 and general concern about being exposed to the virus.
The first year of the pandemic saw a dramatic drop in screenings and rates for heart disease and cancer.
The restoration of screening services by hospitals and clinics has been underway. This could lead to an increase in deaths from non-Covid diseases.
Although mitigation measures like mandatory masking or widespread lockdowns are now largely gone, they will still have an impact on your emotional and physical health for many years.
It was not surprising that payouts rose in 2020. Millions of Americans were anxious to buy policies after the destruction caused by Covid.
Since the summer of 2021, fatalities have been increasing in severity. The new delta strain, which was more deadly than the previous one, was a significant threat to children. These children were not eligible to receive a vaccine at that time so they were more vulnerable to severe illness.
While the payouts for employer benefits plans were increased under the delta variant, in 2021 most of the $100 billion was derived from individual policies.