Did COVID-19 Change Life Insurance Offerings?

Timothy F. Harris (), Aaron Yelowitz and Charles Courtemanche
Additional contact information
Timothy F. Harris: Illinois State University

No 13912, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The profitability of life insurance offerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created significant uncertainty, with dire mortality predictions from early forecasts resulting in widespread government intervention and greater individual precaution that reduced the projected death toll. We analyze how life insurance companies changed pricing and offerings in response to COVID-19 using monthly data on term life insurance policies from Compulife. We estimate event-study models that exploit well-established variation in the COVID-19 mortality rate based on age and underlying health status. Despite the increase in mortality risk and significant uncertainty, we find limited evidence that life insurance companies increased premiums or decreased policy offerings due to COVID-19.

Keywords: term life insurance; COVID-19; SARS-CoV-2; 2019 novel coronavirus; severe acute respiratory syndrome 2 (search for similar items in EconPapers)
JEL-codes: D81 I13 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2020-11
New Economics Papers: this item is included in nep-ias and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published in: Journal of Risk and Insurance, 2021, 88 (4), 831-861

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Related works:
Journal Article: Did COVID‐19 change life insurance offerings? (2021)
Working Paper: Did COVID-19 Change Life Insurance Offerings? (2020)
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