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Life Insurance Demand Quantifies The Anxiety Of Death

One thing that made the pandemic especially hard was constantly feeling the anxiety of death. It’s one thing to worry about your own health and safety. It’s another thing to also have to worry about the health and safety of your little ones and elderly parents.

This winter has been especially difficult for little children due to the tridemic: flu, RSV, and COVID. My entire family has been sick off and on for two months. If I could donate my health points to my 5-year-old and 2-year-old so they could feel better, I would.

Alas, all my wife and I can do is protect them as much as possible. We feel like we’re always making risk-reward health calculations such as whether to go somewhere public or send them to school. At least we are lucky enough to be able to keep them home when they aren’t feeling 100%.

I got my parents to successfully visit us during Thanksgiving. However, with all the viruses going around, we’ve also had to throttle the time spent with them. I pray they don’t get sick as well.

How COVID Affects Life Insurance Rates

I like to quantify our feelings with data. Reconciling the two is a good way to understand whether what are are feeling is logical or not.

Luckily, I stumbled across an insightful article by Kate Dore from CNBC which discusses how COVID has changed the life insurance marketplace. It highlights the change in life insurance demand during the pandemic.

The gist of the article is that life insurers won’t know the full impact of COVID on mortality rates for perhaps 10 years. There are “long COVID” and unknown long-term effects of vaccines to study.

But if I were a betting man, which I am, I expect life insurance carriers to raise premiums to account for higher COVID risk. Therefore, the optimal move is to lock in an affordable life insurance policy now BEFORE more data comes to light.

Feels Good To Lock In Affordable Life Insurance

In December 2021, I was able to finally get a new 20-year term life insurance policy without a medical exam. For three years prior, I had been trying to get something reasonable due to the birth of our second child in December 2019.

My 10-year term policy was expiring in January 2023 and the renewal premium would jump from $40/month to $750/month! But I couldn’t find anything affordable because I had visited an overzealous sleep center in 2017. The business was brand new and the owners encouraged me to do all sorts of tests that went on my health record.

I felt so much relief once I got my new policy through PolicyGenius. It isn’t the $1 million coverage I had, but $750,000 is good enough to feel peace of mind. Further, the policy is a more reasonable $110/month and can be canceled at any time without penalty.

Just look at the annual change in retirees collecting Social Security during the pandemic. There was over a 35% drop since the beginning of 2020 likely due to an increase in elderly deaths!

social security collection during pandemic

Life Insurance Demand During The Pandemic

Everybody intuitively knows why anxiety, depression, sadness, and frustration have increased since the pandemic began. Such feelings sometimes translate into hate for other people, especially for people who seem to be doing better.

Hence, for your safety and happiness, it is important to make yourself look poorer and less successful than you really are during difficult times. Unless you’re trying to build a business, try not to stand out.

Below is a great chart that shows the historical interest in life insurance demand. We can finally quantify the anxiety many of us have been feeling since 2020.

Life insurance application activity was up 3.4% in 2021 after a record-breaking 3.9% in 2020, according to the MIB Life Index’s 2021 annual report. 3.4% and 3.9% doesn’t sound like huge increases, but it is for the life insurance industry.

I suspect once the 2022 data comes out, demand for life insurance will also be up again.

What’s more interesting is the 15.4% and 11% increase in what life insurers paid out in 2020 and 2021 according to data from the American Council of Life Insurers.

What Are Life Insurance Companies Going To Do?

The difference between the payout percentage and the application percentage is an indication of increased deaths and lower life insurance profitability.

A double-digit yearly increase in death benefit payouts is massive. Just think if you were running a business where your costs were up 11% – 15.4% YoY, but your revenue was only up between 3.4% – 3.9% during the same period.

You hope your expenses will normalize as mortality rates revert back to the mean (people go back to living longer). However, you’re not sure exactly when or if this will occur. At the same time, you also fear the long-term repercussions of COVID, which could lead to higher mortality rates (earlier deaths) and fewer premiums paid.

What does a life insurance company do in the medium-to-long run? It will likely raise premiums to make up for lower profitability. And one way to justify raising premiums is by implementing COVID-related questions in the future.

Life Expectancy At Birth, By Sex In The United States

Take a look at this CDC chart on the life expectancy at birth by sex in America. This is the first time in 21 years at least that life expectancy has declined.

Not only has life expectancy declined in America, it has declined by a lot. I would have expected maybe a 0.1-0.3-year decline in life expectancy. But not a 2-3-year decline in life expectancy!

Hopefully, life expectancy rebounds and reverts back to trend over time. But again, we don’t know for sure, which is why it’s best to lock in an affordable term life insurance policy before premiums go higher.

Life expectancy at birth, by sex United States 2000 - 2021

Much Less Anxiety Now

As soon as I locked in my 20-year term life insurance policy in December 2021, my anxiety about dying went away. I beat the clock, which was set to expire on January 3, 2023. My wife had already successfully doubled her coverage amount to match mine for less in 2020. The pandemic spurred us into action.

Now that I know there was an 11% – 15.4% YoY increase in death benefits paid out in 2020 and 2021, I feel even better about both of our new life insurance policies. My premium doesn’t just go toward paying a death benefit, it also goes towards improving my mental health.

If you were or are still feeling anxious about death during the pandemic, know you are not alone. The data backs up what you’ve been feeling all along.

Good thing there’s something we can do about it!

Reader Questions And Recommendations

Readers, what do you think about the life insurance application and payout data during the pandemic? Do the differences in percentages surprise you? Besides getting life insurance, how are you managing any anxiety you have around death and living the best life possible?

To search for affordable life insurance quotes, take a look at PolicyGenius. You’ll get real quotes in just minutes based on the information you submit. From there, you can smartly compare and go with the carrier that best suits your needs.

For more nuanced personal finance content, join 55,000+ others and sign up for the free Financial Samurai newsletter and posts via e-mail. Financial Samurai is one of the largest independently-owned personal finance sites that started in 2009. 

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Life Insurance Demand Quantifies The Anxiety Of Death is written by Financial Samurai for www.financialsamurai.com

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Finance

WATCH: Rapper Tells Joe Biden Voters ‘Get Out of My Concert’

WATCH: Rapper Tells Joe Biden Voters 'Get Out of My Concert'

(ConcernedPatriot.com) – Rapper Waka Flocka urged “all Joe Biden voters” to “get out of my concert” during his Monday performance in Salt Lake City, Utah.

(Viewer Discretion Advised)

Concertgoers could be seen applauding the rapper’s proclamation by raising their arms and making the amiable “hang loose” hand sign.

Following his statement, Waka Flocka began to sing “Grove St. Party,” a song from 2010.

Viewers used social media to voice various opinions; some expressed disapproval of the artist, while others offered support.

“As much as I don’t like Joe Biden this was wrong,” one X user reacted. “They paid money for a show like everyone else and while performing a show they should keep politics out of it.”

“This is wrong to be honest everyone is entitled to vote who they want,” another echoed.

Another wrote, “Insane,” while another stated, “This isn’t right.”

Not everyone in the comment section felt the same way.

“We need more of this,” one X user wrote.

“This is great and is a liberal’s nightmare!” another exclaimed.

“I normally would be against this type of political bullying, but seeing how everyone on the left treated those who wore MAGA hats in 2017, this is a dose of what goes around comes around,” a third said.

“Give them a taste of their own medicine,” another echoed.

“Waka funny af doing this omg lol,” another X user laughed.

“Good. This needs to happen more,” another declared.

It’s no secret that Waka Flocka supports President Trump. In October, the rapper endorsed the 45th president’s 2024 bid for the White House by posting a photo of himself alongside Trump.

More rappers appear to be open about supporting President Trump ahead of the 2024 presidential election.

It’s not looking too good for Joe Biden or the Democratic Party.

Copyright 2024. ConcernedPatriot.com

 

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Articles

IRS Out For Blood More Than Doubling Penalty Interest

IRS taxes increase

In a blatant act of financial tyranny, the IRS is intensifying its assault on hardworking Americans by shamelessly jacking up the interest penalty on underpaid taxes from a pitiful 3% to an exorbitant 8%. This calculated move, recalibrated quarterly, serves as a stark reminder of the insatiable appetite of the IRS, an oppressive behemoth relentlessly extracting every last penny from citizens already shackled by burdensome taxation.

Specifically targeting non-corporate taxpayers, the IRS demands the federal short-term rate plus an additional three percentage points, a blatant money grab that directly targets struggling self-employed individuals, independent contractors, and gig economy workers. These individuals, already grappling to make ends meet, find themselves in the crosshairs of a government voraciously hungry for more of their hard-earned wages.

For those daring to resist this blatant financial coercion and falling short on their payments, brace for the punitive underpayment penalty. There’s a meager concession – if the amount due is under $1,000 after begrudgingly considering credits and other tax factors, citizens might receive a temporary reprieve from the claws of the taxman.

This audacious maneuver puts the self-employed and independent contractors in the IRS’s oppressive grip, coercing them to make quarterly estimated tax payments under the looming threat of severe financial retribution. The January 16, 2024 deadline for the fourth quarter of 2023 is fast approaching – a date that casts a dark shadow over those grappling with the suffocating weight of government overreach.

While the regular W-2 employees might momentarily sigh with relief as taxes are conveniently siphoned from each paycheck, tax experts issue a stern warning against such complacency. Joseph Doerrer, a CPA and financial planner from New Jersey, challenges individuals to scrutinize their tax situation, posing the provocative question, “Are you where you should be?” A question that echoes as a stark reminder of the government’s overreach into the pockets of hardworking Americans.

One taxpayer, Sameet Durg, found himself blindsided by an underpayment penalty reaching into the thousands – an unwelcome surprise that serves as a chilling testament to the relentless demands of the IRS. Durg, a marketing executive, now watches his finances with unwavering vigilance, refusing to endure a hefty hit come April.

As the IRS unabashedly cranks up the interest penalty, taxpayers are left grappling with the heavy-handed tactics of an agency that seems insatiable in its quest to confiscate more of their hard-earned money. This move underscores the urgent need for citizens to vehemently resist the oppressive tax regime, actively defy the IRS’s overreach, and reclaim sovereignty over their wages.

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GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

GUILTY! Sam Bankman-Fried Faces Over 100 Years in Prison

(ConcernedPatriot.com) – Sam Bankman-Fried has been found guilty of all charges related to the collapse of his Bitcoin exchange, FTX.

“A New York jury in Manhattan federal court agreed with prosecutors that Bankman-Fried defrauded investors, customers and lenders in connection with the collapse of his crypto empire,” reported Fox Business.

“Prosecutors accused Bankman-Fried, who founded and controlled both FTX and sister hedge fund Alameda research, of misappropriating and embezzling billions of dollars in FTX customer deposits, scheming to mislead investors, and instructing other executives at his businesses to do the same,” it added.

Bankman-Fried was charged with five charges of conspiracy and two counts of wire fraud in the first two criminal trials.

The maximum sentence for each crime was 110 years in prison.

The hearing for Bankman-Fried’s sentence has been scheduled for March 28.

The Southern District of New York’s U.S. attorney, Damian Williams, commended the decision and said that Bankman-Fried “perpetrated one of the biggest financial frauds in American history.”

“The cryptocurrency industry might be new, the players like Bankman-Fried might be new,” Williams said. “But this kind of fraud, this kind of corruption, is as old as time.”

NBC News gave some background information and historical context before the decision:

“FTX and Alameda quickly collapsed in November 2022 after some of their financial liabilities were exposed.

The fact that Alameda had taken billions of dollars from FTX’s customers and that much of Alameda’s balance sheet was comprised of digital currency assets it had created was central to the case against Bankman-Fried.

Unnerved by disclosures about the firm’s financial position, many of FTX’s customers tried to get their money back. That set off the equivalent of a bank run.

The value of Alameda’s investments crashed, and FTX couldn’t return much of that money because it had been given to Alameda. Some went to the fund’s lenders, and billions were spent on sponsorships, commercials, and loans to top executives. That, too, was a major part of the case against Bankman-Fried.”

Following the collapse, more FTX and Alameda executives were prosecuted, including former CEO of Alameda Caroline Ellison, co-founder of FTX Gary Wang, and chief technology officer of FTX Nishad Singh.

All three pleaded guilty, agreed to cooperate, and testified against Bankman-Fried.

In exchange for their cooperation, they will receive less severe punishments.

In his defense, Bankman-Fried stated that he never intended to deceive anyone and that, following the failure of FTX and Alameda, the government had been searching for someone to blame.

“Mr. Bankman Fried maintains his innocence and will continue to vigorously fight the charges against him,” Mark S. Cohen, counsel to Bankman-Fried, said in response to the verdict.

Williams stated that he hoped the conviction would be an example for others.

“It’s a warning, this case, to every single fraudster out there who thinks that they’re untouchable, or that their crimes are too complex for us to catch, or that they’re too powerful for us to prosecute, or that they could try to talk their way out of it when they get caught,” Williams said. “Those folks should think again.”

Copyright 2023. ConcernedPatriot.com

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