Life insurance sales on the rise, Cloquet agents report
In 2020, a national survey found that 100% of single adults with children were more likely to buy life insurance during the COVID-19 pandemic than in previous years.
Numerous local agencies have noted an increase in the number of life insurance sales seen in the Northland since the start of the COVID-19 pandemic in March 2020.
“The demand has definitely increased,” Paul Schwarz, a Cloquet-based State Farm agent, said. “It’s been more consumer-driven.”
Schwarz explained that typically, State Farm will reach out to customers annually to inform them about life insurance coverage. This year, he said the roles were reversed, with more customers taking the initiative and reaching out to the agency with questions about life insurance.
A survey conducted by insurance research company LIMRA in spring 2020 found that 29% of U.S. consumers reported they were more likely to buy life insurance within the next 12 months than they had been in the past, while 100% of single-survey participants with children indicated that they were more likely to buy.
“There has been a tremendous rise in sales,” Great Lakes Insurance President Don Lathrop said.
Lathrop estimated that the company, with offices in Cloquet and Duluth, has seen a 40% rise in life insurance sales in the Northland area over the past year, with new inquiries coming in on a weekly basis.
Reliable Insurance Agency representative Travis Hansen echoed Lathrop’s findings. He said that Cloquet's Reliable Insurance Agency office has also seen an increase in life insurance applications.
According to Schwarz, the rise in sales during the pandemic could stem from two places. He said about 50% of people have purchased life insurance as a preemptive measure in case they contract a fatal case of COVID-19, while the other 50% have purchased it due to loss of job benefits.
With employers making cuts and layoffs in the pandemic, many people have lost the life insurance coverage they had through their jobs, causing them to look to outside sources for coverage.
In April 2020, Minnesota state reported a 13.1% decrease in jobs from the previous year . Approximately 387,894 jobs were lost.
While the rise in sales seems to be rather consistent, not all local agencies have seen the same trend. According to a representative at Lenny Conklin's State Farm agency in Cloquet, their office has not noted an increase.
In December 2020, ThinkAdvisor reported varying activity regarding life insurance sales in the U.S. since the start of the pandemic, with consumer interest levels rising and falling at unpredictable rates. They also found that some agencies have adjusted the way they do business during this unprecedented time.
According to Hansen, Reliable Insurance Agency regulations around life insurance have become a little tighter, with two or three new questions added to life insurance forms in light of the COVID-19 pandemic.
Schwarz said there are no new life insurance procedures at State Farm, but there are questions about respiratory illnesses on the life insurance forms. He said luckily, no one has tried to apply for insurance while actively battling a case of COVID-19.
Lathrop said there are currently only traditional medical questions asked on Great Lakes Insurance forms.
“Nothing is stopping my clients from obtaining life insurance at this time,” he said.