Last September, I began my 34th year in the insurance industry.
As a brand new insurance employee back in 1988, I would have never predicted that this new job in the insurance industry would become my lifelong career. But it did not take long for me to realize that what we do for our customers is simply amazing and often life changing.
Throughout my career, I have seen many catastrophes and tragedies and witnessed the power of insurance in helping people restore their property and their lives. As the senior vice president for the life companies at Indiana Farm Bureau Insurance, I am privileged to work with a great team that shares our company’s vision, “Our family protecting your family.”
The COVID-19 pandemic during the last two and a half years has further validated my decision to be where I am. Unfortunately, for many in society, it takes a catastrophic event or a personal loss to understand the need for and the importance of insurance. My hope today is to bring awareness to you, to better understand how life insurance can help those you care most about. I would like to share with you how the pandemic impacted the industry, our company and the outlook and importance of life insurance.
Impact of the pandemic on the life insurance industry
The high volume of payments by life insurers since the World Health Organization (WHO) declared a pandemic in March 2020, particularly in the U.S., is a reminder of this ongoing tragedy's terrible toll. These payments have affected insurers’ earnings, but our role as a shock absorber during times of crisis serves an important purpose.
For most of us, we have just witnessed the first pandemic of our lifetime. From a life insurance perspective, the pandemic’s impact is measured by increased number of deaths resulting in claims. To date, the WHO documents nearly 6.5 million deaths from COVID-19, with the United Nations health agency concluding that 14.9 million deaths were either directly or indirectly linked to the pandemic in 2020-21.
Initial shock and disruption
At the pandemic’s outset in March 2020, the groups that fell victims included many older individuals as well as those with severe underlying health conditions. When vaccines arrived in late 2020, there was great optimism that uptake and effectiveness would prove a winning combination in drastically reducing infections and lowering the number of deaths. While vaccines did protect people from severe disease and death, the uptick in vaccination rates was not as high as expected.
This combination of relatively low vaccine uptake and the emergence of the deadly Delta variant was one of the pandemic's many unpredictable developments that left too many people vulnerable.
Estimated to be around twice as transmissible as the original virus by the U.S. Centers for Disease Control and Prevention, Delta was also more likely to cause hospitalization, severe disease and death compared to previously circulating variants.
What also had not been originally anticipated in the pandemic was the substantial percentage of excess deaths among younger people in such a compressed period. Vaccine uptake did increase during this period. Unfortunately, for many it was too late.
While it was clear that relatively low vaccination rates for younger age groups increased risks to insurance portfolios, we had not expected Delta's combination of higher transmissibility and lethality to cause such a large spike in claims. Another factor also played a role: The insured population may have been more socially mobile than the general population as Delta rolled over the U.S., resulting in this group's exposure to the virus as its members frequented restaurants, traveled or participated in large gatherings.
When the Omicron variant emerged in the U.S. in late 2021, it was initially believed to be much less concerning because of its reduced lethality. As things developed, however, Omicron’s increased transmissibility and ability to evade vaccines ultimately has resulted in similar increased number of deaths in the first three months of 2022 when compared to the final half of 2021.
We are encouraged that the increased deaths have declined since the first quarter of 2022, reinforcing our optimism that the worst of this pandemic for much of the world may be behind us. Time will tell.
Life, health and financial shake
When the pandemic hit, many of our employees and agents at Indiana Farm Bureau Insurance had a shift in working styles. Many employees and agents found themselves in a new office space set up at home. This transition was relatively easy for Indiana Farm Bureau Insurance as we already operated in an agile work environment. We were well positioned to make this transition and did so quickly and seamlessly.
Although we were significantly affected just like the rest of the world, our claims team specifically experienced a major increase in their workload. During this time, our claims volume rose significantly. The team continued to provide excellent customer experiences to our beneficiaries and process the claims in a timely manner. That does not mean, however, that it did not take a toll on the team, especially seeing the number of deaths resulting from COVID-19. True to their professionalism, they delivered and continue to do so today.
And of course…impact on life insurance claims
Since the beginning of the COVID-19 pandemic, Indiana Farm Bureau Insurance has processed more than 1,200 death claims providing benefits of nearly $33 million to grieving families, loved ones and charitable organizations.
These proceeds allow people to continue living in their homes, pay bills, pay off debt, allow children to go to college and fund philanthropic activities, just to name a few. Again, this is who we are: “Our family protecting your family.”
On top of the pandemic, our economy is in an inflationary period with rising costs for most goods and services. The proceeds we were able to provide the beneficiaries gave them even more needed funds during this economic period.
As I mentioned previously, unfortunately it takes a personal loss or tragedy for some people to understand the importance of insurance. The industry has seen that the pandemic has heightened awareness about the importance of life insurance. There has been an increase in the number of individuals applying for new life policies, and those who have life insurance in place are continuing to keep their policies in force.
While our organization saw a record number of death claims during the pandemic, we are very strong financially and can deliver on our promises to take care of our customers in their times of need. This past May, the national industry rating agency A.M. Best once again confirmed the rating for United Farm Family Life Insurance (UFFL) as an “A” with a stable outlook. This marks the 61st consecutive year that UFFL has achieved the “A” rating by A.M. Best.
Our response to the COVID-19 pandemic to help our Hoosier during difficult times
The pandemic took a toll on all of us, and as an insurance company in Indiana we wanted to make sure we took care of our fellow Hoosiers even outside of the insurance world. During the height of the pandemic our company issued premium refunds for eligible auto insurance clients. We made a commitment to help our clients through tough times and that was exactly what we did.
Many employees and agents also gave back to the community during these unprecedented times. Many giving financially, and others, when it was cleared by the organization, were able to volunteer in-person and help many of those who were struggling in our Indiana communities.
The new outlook of life insurance
Despite the higher number of claims during the pandemic, our company and the life insurance industry are committed to taking care of our customers and there has been no change in the availability of our life insurance product portfolio. As a matter of fact, during the pandemic we developed a new Paid-Up Additions Rider that can be written with a new Whole Life policy. This rider provides the customer with the opportunity to have flexible premium payments, an enhanced death benefit and chronic and terminal illness protection, to name a few.
I would encourage you to reach out to an Indiana Farm Bureau Insurance agent who can learn about your needs and desires and tailor a life product specifically for you. Life insurance costs less than you might think and often it is less than the monthly amount spent on your daily coffee.
Reassessing your life insurance needs
After an event like this, many seem to look at the world with a different perspective. One of those different perspectives is that life can take a turn that we never expected. Millions of people lost their lives due to COVID-19 and could not have foreseen that unexpected tragedy. We can only hope that something like this will never happen again.
But if it were to happen again, one of the best ways you can prepare is by purchasing a life insurance policy. Life insurance is a way that you can prepare for the unexpected, but also provide for your loved ones if the unexpected were to occur. It isn’t an easy thought process to go through, but the pandemic showed us that life is full of uncertainties.
Support beyond life insurance
For those of you who have experienced loss during the pandemic or more recently, we want to make sure we are there for you even past the point of insurance. We understand that after the loss of a loved one comes with many things you must do to reconcile that loss. During that time, you may not feel that you have the time to mourn or grieve in the way you need to when you lose someone you love.
We offer beneficiary assistance to anyone who is going through a loss and needs additional guidance for what comes next. Don’t take those next steps alone; instead, let us be there for you when you need it.
If you are looking for additional information when it comes to COVID-19 or life insurance and don’t see the information you are looking for,contact a local insurance agent today to help guide you in the right direction.
Is death due to COVID-19 covered under Term Life Insurance?
If I buy a life insurance policy now, will it cover COVID-19?
Yes, if you purchase a life insurance policy today, it will cover COVID-19.
Life can take many turns; 34 years ago, I had no idea that the turn I was making would lead me to a company that I would work for this long. I have seen and learned so many things about insurance during my time at Indiana Farm Bureau Insurance, but I have also learned a lot about the people and reasons why we offer it.
Our company is meant to protect you from the unexpected, and that is exactly what we plan to continue to do for the state of Indiana. When the unexpected happens, expect us.