The Life Insurance Industry is Built for Times Like These

Thomas Harris

By Thomas Harris | July 22, 2020

We live in a much different world since COVID-19 reached our shores early in 2020. Our lives have changed, some dramatically. Our industry has also had to change to adapt to the new realities, but our mission and core principles remain rock solid. And, because of that, the industry is helping sustain America through this pandemic.

After all, we’ve weathered other pandemics, world wars, recessions and depressions. Clearly, the life insurance industry is built for times like these.

At its heart, life insurance is all about giving peace of mind to millions of Americans and their loved ones. You can’t put a dollar amount on peace of mind, but it’s worth noting that life insurance and annuity benefits and claims totaled $762.1 billion in 2019, 23% higher than 2015, as reported by the Insurance Information Institute. Death benefits make up a portion of this amount, but many more Americans are coming to understand the value that life insurance provides while they’re alive.

Our products are built for when the unexpected happens—yes, death—but also for other emergencies. During this pandemic, clients with permanent life insurance can use some of their cash value as a safety net during periods of unemployment or reduced work hours, providing them with undisrupted income.

The pandemic has also triggered a wave of uneasiness about the stock market. Volatility is causing many near-retirees to worry about their ability to retire. Again, cash value life insurance can alleviate anxiety by providing a reliable source of retirement dollars when traditional sources of retirement funding, like IRAs and 401(k)s, are under market pressures. Social Security is the single largest provider of retirement income, at $2.7 billion daily. But, according to the American Council of Life Insurers, our industry is right behind Social Security, paying out $2.1 billion in life and annuity benefits a day.

We’ve worked hard in the last several years to improve the client experience, and I think that’s a big reason why our industry remains strong, even in the midst of a pandemic. At Penn Mutual, we’ve increased the adoption rate of our Accelerated Client Experience (ACE) from 70% prior to the pandemic to 80% today. More clients are interested in purchasing life insurance because it’s now easier to do business in today’s automated environment, with the guidance of a trusted financial professional.

On a larger scale, as one of the country’s leading sources of investment capital, our industry is an engine that helps drive the American economy. In 2019, our industry invested more than $4.3 trillion in the economy, $3.1 trillion of which was in corporate and government bonds. These investments help American companies grow, hire more workers and lift standards of living. They also help fund critical public infrastructure, like highways, schools and other public spaces.

The life insurance industry is also one of the country’s largest employers. According to the Department of Labor, there were 923,000 workers in the life insurance industry in 2019, up nearly 15% from a decade ago.

The industry’s impressive legacy underscores our biggest goal—to insure more Americans so that they can benefit from everything that life insurance offers. Whether as a source of retirement income, money to start or expand a small business, or cash to help you get through an emergency, life insurance offers the versatility and flexibility you can’t find in other financial products.

My hope is that you and your loved ones stay well through the pandemic and beyond. Eventually, we’ll get through COVID-19 and its economic fallout. And when we do, you can be sure that the life insurance industry will continue to be there to help you, your families and business, and the American economy.


ACLI calculations based on NAIC Annual Statement data for 2018.

This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.

Life insurance permanent policies contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Accessing cash values may result in surrender fees and charges, may require additional premium payments to maintain coverage, and will reduce the death benefit and policy values.

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