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The Young and the No-Longer-Coverageless: How The COVID-19 Pandemic Motivated a New Generation to Buy Life Insurance

Since it began, the COVID-19 pandemic has caused more than 1,088,480 deaths in the United States. The virus impacted people across the country regardless of age, ethnicity, or economic background. This widespread death toll meant that many U.S. residents lost a loved one or knew someone impacted by a COVID-related death. 

While many young adults had previously avoided buying life insurance due to the cost, a perceived lack of need, or procrastination, the impacts of the pandemic highlighted the need for coverage. This has caused many to make it a priority and has led to a significant increase in the demand for life insurance policies. Check out this article to learn how the COVID-19 pandemic changed perceptions about life insurance for those under the age of 45.

Enrollment in Life Insurance Up for Those Under 45  

Before the COVID-19 pandemic, many young people thought of life insurance as something they didn’t need, particularly if they didn’t have children. However, these same individuals were forced to confront their mortality as pandemic-related deaths began to rise — not only among the elderly but also among their own peer groups.

For many younger individuals, the impact of the pandemic created an uncomfortable level of uncertainty. Seeing unexpected deaths first-hand and witnessing the financial impacts that can follow a premature death caused many uninsured to worry about how their loved ones would fare financially if the unthinkable were to happen.

This mindset shift has led to an increased interest in life insurance coverage. As a result, the number of life insurance applications among individuals under 45 increased by 8% in 2020. In 2021, the total number of life insurance applications increased by 3.4%, with most of the growth coming from individuals between the ages of 31 and 50.

COVID Risks for Those Under 44  

Many younger people who contract COVID-19 are asymptomatic or have symptoms that are not severe enough to require hospitalization. However, that does not mean they are immune to the impacts, and although the risk of death among healthy young people is relatively small, there is still a risk.

A study of 3,000 adults between 18 and 34 who had contracted the COVID-19 virus found that 21% needed intensive care, 10% required a breathing machine, and 2.7% died.

The risk of severe illness or death due to the COVID-19 virus among those under the age of 45 increases significantly when an individual has severe medical conditions such as obesity, asthma, diabetes, or lung disease. Studies also found that younger individuals with personality disorders, developmental disorders, schizophrenia, and other psychoses had the highest adjusted risk for suffering severe impacts from the COVID-19 virus, possibly due to the medications used to treat these disorders.

Those with heart disease, cancer, endocrine, blood, or neurologic disorders are more than three times more likely to develop severe symptoms than healthy individuals in the same age range.

When COVID-19 symptoms become severe, hospitalization may be needed. Sometimes, the individual may need to be intubated and spend significant time in the hospital. In 2020, the average cost of hospitalization for COVID-19 was $41,611. The average out-of-pocket cost for people with coverage through large employers was $1,280; however, costs varied widely for those with private insurance.

Another phenomenon, known as “long COVID,” causes long-term impacts in individuals who have previously contracted the virus, even if their initial symptoms were mild. Data shows that approximately 30% of adult survivors of the disease reported lingering symptoms that lasted for three months or longer after their initial diagnosis.

Some common long-term symptoms include breathing problems, dizziness, joint problems, rashes, diarrhea, mood swings, sleep problems, cognitive dysfunction, and debilitating fatigue. Unfortunately, younger adults are more likely to have long COVID than older adults. 

What Life Insurance Can Do for Younger Policyholders

The primary benefit of life insurance is the death benefit it pays to your beneficiaries. While younger individuals may not have children to provide for, leaving money to a spouse, parents, or siblings can be beneficial. For example, the recipient can use the funds to pay for your final expenses, which typically cost an average of $6,971 for cremation and $7,848 for a burial.

If a parent or someone else has co-signed on a loan for you, a life insurance policy can offer them financial protection by paying off the loan’s balance upon your death. In certain states, your spouse can also be held responsible for debts you’ve left behind, even if they did not co-sign. Purchasing life insurance can help ensure that no one else is on the hook for paying off your loans if you die.

While they are more expensive than term policies, permanent life insurance policies also provide the ability to build cash value, which can be accessed through withdrawals or by taking out a policy loan. Additionally, unlike the more common term coverage, permanent policies never expire and do not require additional medical underwriting or shopping to find a better life insurance rate.

Since life insurance policy premiums generally get more expensive as you age, purchasing a policy when you’re younger can save you money. However, it’s important to note that if you’ve previously been diagnosed with COVID, you may find that your premiums are impacted due to the potential long-term effects of the disease. Some insurance carriers ask if you’ve had COVID in the past or have recently traveled to an area under a COVID travel advisory. If you have, you must disclose this on your application. Otherwise, if you die from COVID-19, the insurance carrier may deny your claim. 

Plan for your family’s future. Get a life insurance quote today.

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Plan for your family’s future. Get a life insurance quote today.

Get a Quote