COVID-19 Kept U.S. Q1 Group Life Death Claims High

What You Need to Know

The overall excess death rate was the lowest since the lull in the second quarter of 2021.
The amount of benefits paid was 32% higher than normal.
From 2010 through 2013, group life mortality stayed within about 2% of the expected level.

The COVID-19 pandemic and other factors pushed U.S. workers’ death rate far over normal levels in the first quarter of the year, according to a new survey data report from the Society of Actuaries Research Institute.

The number of group life insurance death claims at participating life insurers was 20% above the normal level during the quarter, institute analysts found.

The total amount of group life death benefits paid was 32% above the normal level.

The percentage gap between the actual number of death claims and the expected number was down from 25% in the fourth quarter of 2021.

The gap is also the narrowest it’s been since the second quarter of 2021, when the gap was just 6.8%, and life insurers were hoping the United States had defeated the COVID-19 menace.

But the latest gap between the actual group life claim count and the expected count was far wider than the gaps group life issuers had recorded before the pandemic started.

When the SOA conducted a pre-pandemic U.S. group life mortality analysis, based on life insurer data for the period from 2010 through 2013, the actual number of group life claims was always within about 2% of the expected number.

What It Means

Dale Hall, managing director of research at the Society of Actuaries, said in an email interview that, from an actuarial perspective, the COVID-19 pandemic has and will continue to be an unprecedented event.

Hall predicted that understanding how the fluctuations in mortality will affect clients’ finances will take years to become clear.

“While all advisors should be paying attention to these mortality trends, and be aware [of] how the trends relate to their clients’ financial planning, they should be cautious about overreacting, as published changes in population life expectancy presume that COVID will dramatically impact mortality for every year in the future,” he said.

The impact of COVID-19 on clients’ life expectancy might be different from the impact on the general population, he added.