COVID-19 has changed a magnitude of things around the world, altering the norms of today. Unfortunately, the virus’s impact has made permanent effects on people’s health, including their life expectancies.
The pandemic took a devastating number of lives in a short period of time, but it has also had lasting detrimental effects. According to the National Center for Health Statistics and PNAS, life expectancy estimates have dropped by over a year. They estimate a decrease by 1.13 years, in fact, and the mortality rate is increasing based on the first half of 2020.
Many of the deaths that accounted for the study were between January and June of last year. This was a peak time for Coronavirus infections in combination with a surge in drug overdose deaths. What is more concerning is that life expectancy among Americans is expected to continue to decrease as years pass.
There is no telling how long the effects of Coronavirus will have on life expectancy, but it has made for long and short-term changes to the life insurance and life settlement market. Shorter life expectancies mean more potential for cash value of life settlements. But why is that?
Life Insurance Policy Appraisal Break Down
A policy is appraised based on a few factors, including age, health status, and life expectancy. The shorter amount of time a person is expected to live, the more cash buyers are likely to offer. A policy appraisal then allows the policyholder to sell their policy in a transaction called a life settlement.
In order to qualify for a life settlement, a candidate must be 65 years or older and have a change in health status since acquiring the policy. If a policy owner has experienced a decrease in health, they are expected to have a shorter life expectancy. This matters to buyers on the secondary market because they are responsible for resuming premium payments once taken over.
Therefore, the shorter the life expectancy, the less time the buyer has to pay those premiums, making the policy a higher return on investment. The policy is less liable in the buyer’s eyes. COVID decreasing the average life expectancy for the overall population could make the overall value of certain life-insured candidates’ policies increase. Offers are expected to go up.
Long-Term Effects of COVID-19 on Life Insurance
The long-term effects of the virus include a decline in overall health for most people, especially those on ventilators for long periods. The average lifespan for Americans decreased from nearly 78.8 years old to 77.8. One year may not seem significant to many people, but it takes something catastrophic to cause such a decrease. A whole twelve-month loss for the average person is a long time.
Unfortunately, a gap between races means that some people may have even short life expectancies. Life expectancy for Hispanics decreased by nearly 2 years while Black Americans are experiencing a gap of 6 years, according to a study done by Dr. Bassett at Harvard. More research is still being done, considering it has only been one year, and scientists continue to learn more about Coronavirus. However, these populations have been affected drastically, and Covid will continue to run its course.
Now is The Time Get Your Life Insurance Policy Appraised
The best way for policyholders to be prepared is to get their policy appraised. Many factors impact the life settlement market, but an overall population decrease will have a much more significant impact for those who want to sell their life insurance policy. They could get more cash value from a life settlement.
Now is a great time for insureds to get their policies appraised and monitor their policy’s value. If you have recently had your policy appraised, we encouraged people to do so again. It may have increased. This year and the next could be a good time to sell your policy and get higher offers than any other time on the market. It is a momentous time to take advantage of.
Many more people can now qualify for a life settlement. You do not have to have a decline in health for many offers, for example. To learn more about life settlements and see if you qualify, contact our experts at Life Insurance Settlements Inc. We have helped thousands of clients get the most out of their policies to take care of their lives’ needs. Our life settlement brokers can get your policy appraised and find an offer that is right for you.