C3 Financial Partners

COVID-19’s Current and Future Impact to Life Insurance | Coffee with C3 Financial Partners

C3 Financial Coffee CupCeleste C. Moya shared “The Industry Impact of COVID-19” during our June 11, 2020 “Coffee with C3”.

We discussed how COVID-19 has impacted the life insurance industry and how this will affect future life insurance planning.

We shared fifteen minutes of insights to our group of Zoom attendees, at the same time, shared virtual coffee.  Below is a snapshot of key insights discussed:

Current State of the Life Insurance Industry:

  • Impacted by low interest rates and market uncertainty.
  • Premium and death benefit limitations (vary by carrier).
  • Older age applications being placed on hold. For some carriers, it is 70+ and others it is 80+.
  • Discontinuation of certain products.
  • Underwriting changes being made daily and without notice (ex: removing table shave programs, effective immediately).
  • For certain survivorship products, uninsurable insured currently not being accepted.
  • Crediting rates being decreased.
  • Cap/par rate decreases on Index Universal Life (IUL).
  • Changes happening faster than expected.
  • 1B is paid out daily by insurance companies in life and annuity claims (Social Security) pays out 2.7B per day).

What We Expect in the Next 6-9 Months:

  • Much stricter underwriting on foreign travel.
  • Underwriting may be harder to negotiate and may be less flexible overall.
  • Other carriers removing underwriting incentives (i.e.: table shave programs).
  • Increased streamlined underwriting programs for smaller face amounts (currently up to $5M), but perhaps with stricter UW guidelines.
  • More crediting rate decreases and cap/par/floor decreases on IUL.
  • Certain index accounts will be removed (ex: uncapped).
  • Discontinuation of more products.
  • Reprices, mostly resulting in increased premiums.
  • Limited number of insurance companies offering coverage for older age clients, and perhaps an overall max age reduction across carriers/products (ex: age 80 as the max age versus age 90).
  • Further limitations on term conversion options, both conversion period and products.


What to do Now:

  • Take advantage of current pricing and product options. C3 leverages LifeTrends to look at the entire market and find optimal solutions.
  • As clients leverage low interest rates in their estate and business planning, consider if life insurance should be part of the plan.
  • Review existing coverage to ensure it still meets goals and objectives and fits into current planning.
  • Encourage clients to protect their insurability and obtain coverage while it is an option. Uninsurability can happen suddenly and can result in the permanent inability to obtain coverage. Even just a change in health (for the worse) can be detrimental in obtaining coverage that fits into a person’s financial portfolio.
  • Clients need to be looking at Long Term Care as part of their planning to protect other assets, especially in unforeseen and drastic market downturns, like the current one we are in.

Click here to watch Celeste speak on the Impact of COVID-19

C3’s Marketing Director, Kristi Kerr Leonard  savoring a cup of coffee while learning about the “Tale of Two Mothers.”
C3 Zooming Team: Carolyn J. Smith, Senior Partner; Celeste C. Moya, Partner; Todd S. Healy, Founder, sharing insight on Zoom.

Interested in the next Coffee with C3? Contact Rebecca Bates.

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