A new NerdWallet survey found that Americans gain and lose interest in coverage based on case numbers.
This year, there has been a substantial rise in life insurance shopping behaviors among Americans. Many studies indicate that it is a response to the COVID-19 pandemic, and people’s increased awareness of their own mortality.
The research, conducted by NerdWallet, found that 35 percent of American consumers who had been life insurance shopping during the pandemiclost interest when the cases of COVID-19 in their area started to decrease. This finding backs the assumption that previous studies have suggested, when saying that life policies have become a “panic purchase”, said Lakenan Insurance broker vice president of financial services, Grant Dunn.
“That’s not what life insurance is made to do. It’s not meant to protect people for the next six months while COVID cases are high in their area. It’s meant to protect the family during all of your income-earning years and beyond,” explained Dunn.
The pandemic has revealed a disconnect in American life insurance shopping comprehension.
The issue Dunn discussed was that if the pandemic identified a potential necessity for coverage, then it is a long-term issue that needs to be addressed, as opposed to being one that is based exclusively on COVID-19 risk in the area. A hole in an individual or family’s coverage needs remains the same whether there is a pandemic or not.
The NerdWallet study was conducted by The Harris Poll on the company’s behalf. It asked American adults who had considered purchasing a life policy due to the pandemic – and then decided against it – why they made their ultimate choice.
What the research showed was that 35 percent felt that it was no longer as necessary because COVID-19 cases started falling in their area. Another 25 percent said that the policies were too expensive. An additional 24 percent determined that the coverage they received through their workplace benefits was adequate to meet their needs. The survey also revealed that 17 percent of adults in the US who were life insurance shopping because of the pandemic but decided not to buy did so because they didn’t understand how it works. Another 14 percent said that they didn’t know how to get started.