Life Insurance Trends Pre- and Post-COVID-19:  Insights from the Survey of Consumer Finances

COVID-19 has raised awareness of health and mortality risks, and there has been increased research on its impact on the demand for life insurance. However, limited literature exists on this topic from the perspective of households. The study fills this gap and explores trends in life insurance from 2019 and 2022, using nationwide Survey of Consumer Finances data with more than 4,500 participants. The examination of the data shows a comparison of 2019 and 2022 responses on how many households have life insurance, the death benefit of term and cash-value policies, and the borrowing amount of cash-value policies. Life insurance applications spiked after 2021 due to fears associated with COVID-19, but the data shows an overall decrease in the total number of policies held for 2022. This decline is shown to be influenced by underwriting standards that were changed due to the virus. On the other hand, households with life insurance increased their total death benefit amount in 2022, reflecting their heightened risk aversion attitude and increased awareness of financial planning. The coverage of cash-value policies increased more significantly than term policies. This suggests that households looked to plan financially for the long run and to accumulate cash value for emergencies. In conclusion, this study demonstrates that the pandemic triggered an increased interest in holding life insurance among households. This study can be used for households to plan their finances and for insurers to see life insurance trends during a pandemic.