Longevity Expertise Meets COVID-19

May 6, 2020

Shortly before COVID-19 overwhelmed the nation, The Washington Post asked: How big is the risk associated with electing an older person as president?

It’s a significant risk, the Post suggested, based on information obtained from life insurers, experts in measuring longevity.

The Post researched the expected cost for a $400,000-benefit life insurance policy, representing the president’s salary, on the lives of each Democratic presidential candidate.

Their finding: the three oldest candidates at the time, 77-year-old former Vice President Joe Biden and two 78-year-olds, former New York Mayor Michael Bloomberg and Vermont Senator Bernie Sanders, would be charged a rate 65 times the amount of the youngest Democratic candidates at that time. They were former South Bend, Indiana Mayor Pete Buttigieg and Hawaii Congresswoman Tulsi Gabbard.

The electorate may not worry as much about age – President Donald Trump turns 74 in June — as life insurers do. Age is a key factor in determining life expectancy, which is central to life insurance underwriting.

The issue resonates today as life insurers cope with COVID-19.

COVID-19 has raised some of the greatest underwriting challenges since World War II.  Companies want to offer as much coverage as possible at the lowest rate, but they must manage the risk of the pandemic.  When considering applications, companies must also ensure they can meet obligations to existing policyholders.

Data is what they’re using to meet consumers’ needs while managing risk.

While companies rely on differing data sources, U.S. Centers for Disease Control information makes clear that COVID-19’s highest mortality rate is among older Americans.

Life insurers have always had underwriting age limits for older, and younger, applicants. Not all insurers operate the same. They set their own criteria. And they respond differently to developments, whether they’re a pandemic or advances in medicine.

As a result, life insurance coverage remains available to older Americans from some companies, even if not all of them.

It has perhaps never been clearer that life insurance for many is best secured before a crisis – and at a younger age.

Jack Dolan

Jack Dolan is Vice President, Public Affairs at the American Council of Life Insurers (ACLI). A former journalist and Capitol Hill aide, he joined ACLI in 1991. He has represented ACLI in print, broadcast and online news outlets on a wide range of financial and retirement security issues facing American families.