And this is bad for lapse-supported products, such as level-term.
For you non-life folks: charge someone a flat premium for a term of usually 10, or 15, or 20 years. The premium is way too high, relative to their chance of dying, in the early years and way too low in the late years and about right in the middle. You build up a reserve in the early years to cover the inadequate premium in the late years.
Unlike whole life policies, level term policies do NOT build a cash value. (In theory they probably should, but in actuality they definitely donât.) So the best thing that can happen to the insurance company is for the policyholder to overpay for the first ~50% of the term and then walk away from the lean later years when theyâd otherwise be underpaying.
If thatâs not happening as much as the insurer thought it would, thatâs an additional squeeze.
The lower lapses goes both ways. If EVERYBODY has similar lapse improvement, then it is good for the insurer. At some point, you prefer people to lapse, but lapse rates are typically very low anyway at that time.
I was seeing 20-30% (can vary during the year) overall during the pandemic. I think 2021 excess mortality was worse than 2020, even removing Q1 2020 from the equation.
Depends on the insurerâs mix of business and how much (by dollar) is lapse-supported vs not, but for many insurers this is probably the case. If an insurer is heavy on level term and other lapse-supported products then it could be bad. Level Term is a popular and competitively priced product with not a lot of wiggle room.
I would not have expected that to be the result. But the vaccines didnât roll out until February, IIRC, and most people wouldnât have hit their âfully protectedâ date until 2nd quarter or close to it, so Iâm guessing 1st quarter was pretty bad.
Also, speaking for myself⌠I gained 15 pounds during the pandemic. And, um, letâs just say that I did not start the pandemic 15 pounds underweight.
Talking to friends and co-workers it seems that I am not an outlier. If the whole country gained 15 pounds on average, I expect youâd see that in mortality stats.
I have no data other than anecdotal to suggest that the average adult gained 15 pounds, but it seems plausible.
Third quarter was ugly, and yes most of the âdeath waveâ in 3rd quarter was from COVID, and was mainly older folks. But if weâre looking at relative impacts, itâs on younger people.
Hereâs my stacked column by age, including the old people:
I found this chart interesting and was just thinking yesterday it would be nice to see cause of death broken out by age bands. I think you may have had this in an earlier article, but it saved me a search.
What is interesting is increase in deaths due to known comorbidities of COVID, such as heart disease and diabetes. I think âAll otherâ includes non-COVID P&I deaths just given the winter spikes and I am not sure where else it would be included in the chart. Those all seem awfully suspicious like underreported COVID deaths. Heart disease, over a longer term, I could see increasing as the pandemic went on as people skipped the gym, gained weight, etc, but it seems like a noticeable increase in a few months could be more longer term damage caused by COVID showing up months later. Diabetes, possibly the same. All-other, if driven by P&I, what would have been the cause for an increase other than COVID? There is also the potential for the politics of the county coroner to come in to all of this, as noted in Whiskeyâs article. The shorter term month to month increases in some of those other causes does coincide with COVID upticks.
I agree that it looks like most of the excess non-COVID mortality from the group is due to accidental death including suicides, but it seems there is evidence of a fair amount of undercounting of the COVID deaths, possibly a third of cases were missed.
Overall, maybe it doesnât matter that much - ages 35-44 is still a smallish share of the overall cost of COVID, especially if the pattern is not repeated in the high age bands.
Well, Iâd like a âbeforeâ trend line and an âafterâ trend line, to see how COVID might have âaffectedâ these mortality rates.
No rush, though. If you can have it done by 2112, that would be great. Could be permanent waves in the data. If you could make them into moving pictures that would be awesome.
