Demand for digital-first insurance policies climbs, Policygenius reports

A report by Policygenius has revealed that there has been significant growth in demand for no-medical life insurance policies that provide a digital experience.

The 2022 Policygenius Life Insurance Trend Report focused on major shifts taking place in the life insurance industry, including significant growth in demand for no-medical-exam life insurance policies and strong insurance purchasing from people age 18-44.

Overall, despite market volatility brought on by Covid-19 and a significant uptick in death claims, life insurance pricing remains stable, Policygenius said.

Internal Policygenius data revealed that from October to December 2021, roughly 56% of life insurance applications submitted through Policygenius were for no-medical-exam policies, compared to 26% in January to March 2021.

According to Kartik Sakthivel, vice president and chief information officer of the Life Insurance Market Research Administration (LIMRA), a not-for-profit trade organisation, nine in 10 insurance executives surveyed in 2020 reported that their customers “have an increased appetite for the digital shopping experience,” a trend that continued into 2021.

In addition to providing convenience, accelerated underwriting policies can be more affordable options for shoppers. Policygenius Life Insurance Price Index data from the last year shows that no-medical-exam term insurance policies are competitively priced compared to term policies requiring a full medical exam — and some applicants even paid less for no-medical-exam term coverage. For example, 25-year-old females buying $250,000 in coverage paid 1.6% less in 2021 for no-medical-exam term policies than they did for traditional policies.

In terms of the amount of coverage purchased through Policygenius in 2021, people 18-44 bought the vast majority (84%) of policies exceeding $1m in coverage, and 81% of policies from $750,001 to $1m.

Policygenius said that “Gen Xers and Baby Boomers” (people age 45 to 64) bought only 16% of policies over $1m in coverage, and those 65 and up didn’t buy any of these policies.

Compared to other demographics, Gen Xers and Baby Boomers also bought less coverage overall through Policygenius in 2021: 85% of policies bought by people over 65 and 87% of the policies bought by people aged 45 to 64 were for under $250,000.

This report drew on Policygenius’ internal data as one of the largest term life insurance distribution platforms in the US, with more than $120bn in face amount placed in force, as well as insights from other industry thought leaders.

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