Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/232664 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13912
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
The profitability of life insurance offerings is contingent on accurate projections and pricing of mortality risk. The COVID-19 pandemic created significant uncertainty, with dire mortality predictions from early forecasts resulting in widespread government intervention and greater individual precaution that reduced the projected death toll. We analyze how life insurance companies changed pricing and offerings in response to COVID-19 using monthly data on term life insurance policies from Compulife. We estimate event-study models that exploit well-established variation in the COVID-19 mortality rate based on age and underlying health status. Despite the increase in mortality risk and significant uncertainty, we find limited evidence that life insurance companies increased premiums or decreased policy offerings due to COVID-19.
Subjects: 
2019 novel coronavirus
SARS-CoV-2
COVID-19
term life insurance
severe acute respiratory syndrome 2
JEL: 
D81
I13
Document Type: 
Working Paper

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