U.S. life insurers paid a record $100 billion in death benefits in 2021, an increase of more than 27 percent from 2019.
The increase in death benefits is thought to be related to deaths during the pandemic. More than a million people have died from Covid, although the true death toll from the pandemic is expected to be much higher due to non-Covid causes such as drug overdoses and delays in critical medical supplies.
Payouts will increase 11 percent to $100.19 billion in 2021, according to the American Council of Life Insurers. The latest increase follows a similar 15 percent year-over-year increase in 2020.
That percentage has increased annually since 2019, when insurers paid out about $78 billion.
The reasons for the deaths have not been disclosed by the ACLI, which says the surge is related to the pandemic.
Life insurance is designed to protect spouses and children from potentially devastating economic damage caused by the unexpected death of a family member.
The US saw the largest increase in life insurance payouts since the 1918 flu pandemic, when payouts rose 41%.
Myrna Guerrero, national sales manager for major life insurance company Primerica Inc., said: “Obviously we don’t take away the pain of losing someone, but financially you’ll be fine.”
Most Americans get access to life insurance as part of their employee benefits, although many buy individual plans that are not affiliated with their employer. An estimated 52 percent of Americans have life insurance.
Andrew Melnyk, ACLI vice president, research and chief economist, said: “For the second consecutive year, life insurance payouts increased by double-digit percentages. And for the second year in a row, life insurance companies rose to the challenge, also paying record high annuity payments that normally go to retirees.
“This is a testament to life insurers’ ability to prepare for any eventuality and to keep their promises to consumers at all times.”
The annual increases reported since the start of the pandemic are similar to those of payouts during the 1918 flu pandemic, when payouts rose 41 percent.
Life insurers are also seeing an increase in claims, which they say is related to delays in finding medical care due to the 2020 lockdowns and general concerns about exposure to the virus.
Screening and diagnosis rates for serious health problems such as cancer and heart disease fell sharply in the first year of the pandemic.
Clinics and hospitals have begun to restore their screening services and deaths from non-Covid health problems are expected to rise.
While mitigating measures such as mask requirements and widespread lockdowns have largely disappeared, the impact of these measures on both emotional and physical health will be felt for years to come.
The surge in payouts in 2020 was not unexpected. The chaos that Covid has caused around the world has prompted millions of worried Americans to buy policies.
Deaths aged until the Delta variant appeared in the summer of 2021. The new, more infectious Delta strain in 2021 posed a particularly great threat to children, who were then ineligible for vaccination and therefore more vulnerable to serious illness.
The Delta variant increased employer benefit plan payouts in 2021, although most of the massive $100 billion total came from individual policies.
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Crystal Leahy is an author and health journalist who writes for The Fashion Vibes. With a background in health and wellness, Crystal has a passion for helping people live their best lives through healthy habits and lifestyles.
