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Older Americans have proven particularly vulnerable to COVID-19. As of April 11, seniors comprised nearly 78% of U.S. coronavirus victims, according to the Centers for Disease Control and Prevention. Their high risk hasn’t slipped by actuaries.
In response to the pandemic, life insurance companies are cutting policy access to older applicants to preempt payouts and mitigate losses.
Prudential Financial Inc (NYSE:PRU) and Protective Insurance Corp (NASDAQ:PTVCA)(NASDAQ:PTVCB) have temporarily suspended policy applications for people over 80, according to Reuters.
Lincoln National Corporation (NYSE:LNC) will delay policy approval for individuals around that age. Other companies established similar cutoffs at 60 or 70, the newswire said.
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The modifications typically apply in cases requiring full underwriting, which includes a meticulous review of health records.
With the enrollment changes, life insurers will lose out on premium revenue. Americans in their 70s comprise between 2% and 3.5% of sales, according to Reuters, but their premiums can be 11.5 times higher than those of younger policyholders with similar characteristics.
Such losses are worth the reduced risk to long-term financial health, according to some companies. In fact, some of their reinsurers are advising cautious approaches.
