U.S. life insurance application activity finished 2021 with annual Year-over-Year (YOY) growth up +3.4%, according to the U.S. MIB Life Index, representing the second consecutive year of growth.
Following record-breaking YOY growth in 2020 of +3.9%, 2021 achieved the second highest YOY annual growth rate on record. YOY comparisons are impacted by fluctuations in 2020 activity due to COVID; however, when comparing 2021 results to 2019, the industry was up +7.4%.
2021 started strong with growth in the first four months, including the strongest YOY growth for the months of February, March and April on record. May and June saw flat activity, followed by a decline in July. August through November experienced growth or flat activity, while December ended the year at a decline. Note, YOY declines in July and December can be attributed to record-breaking high activity during those months in 2020.
Activity for all ages showed annual YOY growth for 2021, with the most growth coming from the 31-50 and 71+ age bands. Full year activity for ages 0-30 was up +2.2%, ages 31-50 up +4.5%, ages 51-60 up +3.1%, ages 61-70 up +2.3% and for ages 71+ up by +4.1%.
This growth pattern is in contrast to 2020 where age 31-50 lead in YOY growth, but the 71+ age group experienced declines. Throughout the year activity saw several shifts in trends by age band. However, as of April the 71+ age band began to outpace the younger set and, with the exception of September, showed the highest YOY gain across all age bands for the remainder of the year.
Growth in 2021 was driven by increases in activity across face amounts up to and including $250,000 and over $500,000. In a continuing trend that started last year, the MIB Life Index saw the most growth in larger face amounts.
When examining age bands, annual YOY activity for ages 0-30 showed growth for face amounts up to and including $5 million, in the double digits for policies over $1 million up to and including $2.5 million. Ages 31-50 saw annual YOY growth for amounts up to and including $250,000 and over $500,000, in the double digits for policies over $5 million.
Ages 51-60 saw annual YOY growth for all amounts, in the double digits for amounts over $5 million. Age 61-70 saw annual YOY growth for face amounts up to and including $250,000 and over $1 million, in the double digits for amounts over $2.5 million. Ages 71+ saw annual YOY growth for amounts up to and including $250,000 and over $500,000 up to and including $5 million, in the double digits for amounts over $2.5 million up to and including $5 million, but double-digit declining activity for face amounts over $5 million.
When examining product types, 2021 saw annual YOY growth in Universal and Whole Life of +3.0% and +8.3% respectively. Term Life annual YOY application activity was relatively flat at -0.1%. Growth patterns were consistent across age groups with growth percentages highest for Whole Life, followed by Universal Life and flat or declining for Term Life.
MIB Group also examined activity by gender and observed that annual YOY growth in application activity for males slightly outpaced that for females. When looking at trends in face amounts by gender, MIB Group saw a significant difference in activity for females vs. males for policies over $1 million. Females saw YOY growth in the double digits for all face amounts over $1 million, with growth for amounts over $5 million in excess of +35%. Males in contrast saw flat activity for policies over $5 million and single digit growth for policies over $1 million up to and including $5 million.
The MIB Life Index is the life insurance industry’s timeliest measure of application activity in the United States. Released each month, the report is based on the number of searches MIB member company life underwriters perform on the MIB Checking Service database. Since over 95% of life insurance applications in North America include an MIB search, as a routine underwriting requirement, the MIB Life Index provides a reasonable means to estimate new business activity.
For more detailed insights, read the full 2021 MIB Life Index Annual Report, available on www.mibgroup.com.
I'm a bit surprised that the growth wasn't larger than 2020 especially since more people had died from covid in 2021 than 2020.
The other item I find interesting are the larger face amounts growth, and in a lot of cases, double digit growth for $1 million+ applications.
I would guess that the main reason why that happened is that more people with the means to pay, realized that they could REALLY DIE from covid by constantly hearing/reading/seeing the news about hospitalization numbers and death numbers. They took it to heart so much, that they could actually imagine not being alive and seeing their spouse and kids trying to get by without their income and as a result was willing to get the kind of face amount to match their possible expectation of death from the virus or complications due to the virus.
I'm sure there are other opinions about that particular larger face amount growth in 2021.