U.S. Life Activity Tilts Toward Bigger Policies

U.S. individual life insurance application activity fell 2.6% in September, but the picture differed based on the size of the policies.

MIB Group, the organization that compiles the monthly life application activity index reports, says application volume for policies providing up to $250,000 in coverage was more than 10% lower than in September 2022.

Activity increased for policies providing $250,000 to $1 million in coverage, and it increased by more than 10% for policies providing more than $1 million in coverage.

Application activity trends looked much stronger for clients up to age 50 than for older clients, and stronger for universal life than for term life or whole life.

In August, overall MIB application activity was 1.8% higher than in August 2022.

What it means: If application activity trends for big universal life policies for people up to age 50 are strong, that could mean that more relatively high-income clients are trying to use cash-value life policies to save for long-term goals, or to create inflation-resistant rainy day funds.

Drops for older applicants could be a sign of life insurers increasing prices, tightening underwriting standards or changing marketing strategies.