Death benefits paid by life insurers surged to their highest level during the COVID-19 pandemic since the 1918 influenza epidemic, multiple sources reported.
Death-benefit payments surged 15.4% on a year-over-year basis in 2020 reaching $90.43 billion at least in part due to pandemic-related causes, according to an American Council of Life Insurers (ACLI) report. Life insurance payments during the 1918 influenza pandemic soared to 41%.
“The data tells a compelling story about the resiliency of life insurers and their ability to protect Americans’ financial futures at all times,” Andrew Melnyk, ACLI Vice President of research and chief economist, said in the report. “In a year that was taxing for everyone, life insurance benefits provided families with the means to endure financially after the loss of a loved one.”
Total life insurance coverage hit $20.4 trillion in 2020, the report said, with a record $3.3 trillion of new life insurance purchased. Over 43 million life insurance policies were sold last year, ACLI found.
“Behind every data point, every payment and every policy, there are stories of real people and families who have found some peace of mind during a difficult time,” Melnyk said. “That is the mission of the life insurance industry and one we’re prepared to fulfill no matter what.”
The impact on the insurance industry was lighter than some expected at the beginning of the pandemic because many of the deceased were elderly, The Wall Street Journal reported.
The pandemic did eventually trigger the fastest increase in sales of insurance policies in 25 years, however, according to the WSJ. Industry assets surged 7.7% to a total $8.2 trillion in 2020, according to the ACLI report.
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