Consumers have been reducing their reliance on life insurance policies significantly since the end of the recession, but even repeated economic improvements over the last few years haven't served as much of a motivator for many to get back on the horse.
The total amount of life insurance application activity on an annual basis across all age groups dropped another 3.7 percent in June, according to the latest MIB Life Index. This marks the fifth time since the start of the year in which year-over-year application volume declined, and, to this point, now stands 2.2 percent below the levels observed in the first half of 2012. The largest of these slides so far was observed in April, when activity was down some 4.7 percent from the same month last year.
However, it's important to note that, much of that dip came as a result of fewer people under the age of 44 buying insurance in the first place, the report said. In all, people in that demographic applied for 5.7 percent fewer policies than they did in the same month last year, more or less in line with the 5.6 percent decline observed in April, but considerably more than the 2.2 percent from May. For the entire second quarter, this type of activity had slumped 4.3 percent.
The change in volume from those 45 to 59 years old was far more modest, with a drop of just 2.8 percent, the report said. That was down from the 3.4 percent annual dip just a month earlier. Meanwhile, those aged 60 or older continued to seek this type of insurance in larger volume for the second straight month, with applications rising 1.1 percent on an annual basis in June, following a 1.6 percent increase the previous month. Year-to-date, applications filed by people in this age group are up marginally, at about 0.2 percent.
With activity stumbling this year, it may be wise for life insurance issuers to do more to make their products attractive to consumers in just about any way they can. Experts have long noted that the issues these companies face likely come as a result of consumers thinking life insurance is something they can't afford to have, as opposed to a vital tool for protecting their loved ones. Highlighting the benefits of these products, and doing more to keep costs as low as possible, may therefore be a major boon as the economy continues to improve going forward.