Did COVID-19 Change Life Insurance Offerings?

Timothy F. Harris

Aaron Yelowitz
University of Kentucky

Charles Courtemanche
University of Kentucky

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Abstract: The protability of life insurance oerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created signicant 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 oerings 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 signicant uncertainty, we find limited evidence that life insurance companies increased premiums or decreased policy oerings due to COVID-19.

Published: November, 2020

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