Some Life Insurers Won't Issue New Policies to Older Adults During Pandemic

"In light of COVID-19, insurers are reevaluating their ability to pay a potentially higher claims rate for new clients who are above a certain age and weighing that against the demographic profile of their existing businesses,” he says.

According to the Centers for Disease Control and Prevention (CDC), people age 65 and up are at higher risk for severe complications from COVID-19, the respiratory illness caused by the coronavirus, particularly if they have underlying health conditions such as diabetes, asthma, serious heart conditions or chronic kidney disease. As of April 28, that 65-plus age group had accounted for 79 percent of U.S. COVID-19 fatalities, a provisional count maintained by the CDC found.

"The guarantees made to policyholders obligate life insurers to consider new factors impacting mortality when they arise,” says Paul Graham, senior vice president of policy development at the American Council of Life Insurers. “But even as COVID-19 threatens the health of millions of Americans, coverage is available,” he adds. “A person unsatisfied with the response from one company can always visit another. And keep in mind, if an application is delayed because of COVID-19, it is not a rejection."

Lincoln National, for example, continues to accept applications from all age groups, and the applications remain open for a year. But the company is postponing approvals for those 80 and up. A spokesman said that Lincoln will “reevaluate our position as the COVID-19 pandemic evolves."

'Unprecedented situation'

A spokesman for Mutual of Omaha says its move to suspend sales of fully underwritten life policies to applicants age 70 and over was based on guidance from reinsurers — companies that insure insurers and share in the risks of underwritten policies. Underwriting requires a medical exam and other health information to establish premiums.

Mutual of Omaha continues to sell non-underwritten whole-life policies, a “much more common life insurance choice for seniors,” regardless of age, the spokesman says.

Prudential has temporarily restricted new applications from people 80 and older. A company spokesman says this group accounts for 0.1 percent of Prudential's sales volume. Protective Life has also paused approvals for consumers 80-plus.

"We constantly monitor our pricing, product availability and underwriting standards across all age groups to ensure we are appropriately managing our risk and can fulfill our commitments,” says Brad Gabel, Protective Life's chief underwriting officer.

AARP asked about a dozen other major insurers if they have made any age-related changes in their application or approval procedures. Of those, Guardian Life, MassMutual, Nationwide and State Farm say they are not suspending or delaying applications based on age. Two firms, Pacific Life and Penn Mutual, declined to comment.

While insurers are risk averse, “those with relatively stronger balance sheets might set age-related changes at a higher age … or hold off on any age-related changes for the time being while continuing to monitor this evolving situation,” Kumpuris says. “This is an unprecedented situation, so it's challenging to predict what insurers will do as the situation evolves.”