# Statistics Can Be Misleading, Especially During a Pandemic

This article was written by Ronnie Klein for the International Insurance Society, a sister organization of Insurance Thought Leadership, under the umbrella of The Institutes. To see more IIS articles by Ronnie and other IIS experts, visit internationalinsurance.org.

There is a saying in German: “Traue keiner Statistik, die du nicht selbst gefälst hast.” This translates as, “Do not believe any statistic that you have not forged yourself.”

Many credit this saying to Winston Churchill, but Nazi propagandists actually made up the quote and attributed it to Churchill as a way of impugning him as a liar. It appears that “fake news” is not a new phenomenon.

An example of misleading statistics is when determining whether to take a medical test for a rare but serious disease like spina bifida. This rare disease causes the spine of a baby to form improperly and can lead to serious mobility impairments and possible organ malfunctions. Many doctors will recommend that the patient undergo a blood test to detect this disease. The test has improved over time and is now 95% accurate.

This sounds like an easy choice. The test is 95% accurate and can detect a horrible disease. But let’s explore.

The probability of contracting the disease, according to the U.S. Centers for Disease Control and Prevention (CDC), is 1 out of 2,758. Therefore, out of 1 million pregnancies, there should be approximately 363 babies, or 0.03%, born with spina bifida.

Assuming that all 1 million women opt for the test and that no false negatives occur, there will be 363 actual positives and about 49,982 false positives ((1,000,000 – 363) x .05) for a total of 50,345 positive tests. Receiving a positive result now means that the baby has a 363 in 50,345 chance of having spina bifida — or 0.7%.

Does this sound like a test with 95% accuracy?

Further, once a woman receives a positive test for fetal spina bifida, she must undergo follow-up tests that are a bit more invasive to more accurately determine the status of the baby. However, those additional tests take time to schedule and to generate results.

How much stress is the woman under during this time? What effect could this have on the  unborn child? None of this is usually discussed with the mother.

How can a test that is 95% accurate change the probability of contracting the disease from 0.04% (363 out of 1 million) to 0.7% (363 out of 50,345)? Should an expectant mother take a test for a disease that will affect 363 babies out of 1 million? Armed with the  correct statistics, an expectant mother will be much better prepared to make an informed decision.

COVID-19 statistics can also be misleading. The most common misstatement is that the disease only kills the elderly. According to the most recent data from the CDC at the time of this writing, 80.5% of COVID-19 deaths have occurred in people ages 65 and over in the U.S. On the surface, this seems like a daunting fact.

Of the nearly 540,000 U.S. deaths attributed to COVID-19 as of this writing, almost 435,000 are from people age 65 and over. Breaking it down further, 58% of all COVID-19 deaths occur in  people age 75 and over. It is no wonder that most of the attention has been given to the most vulnerable people in these age groups. Why worry about those under age 65 when only 20% of COVID deaths can be attributed to this cohort?

Examining mortality by age for all causes shows that the statistics for COVID deaths do not vary greatly from all-cause mortality. Said another way, COVID deaths by age are highly correlated to deaths by all causes (see Figure 1).

Figure 1: COVID-19 Mortality vs. All-Cause Mortality by Age Group

Limiting the analysis to age groups over 25, which basically eliminates infant mortality and teen auto accidents, shows an even stronger correlation (see Figure 2).

Figure 2: COVID-19 Mortality vs. All-Cause Mortality by Age Group (25+)

While the media is quick to broadcast that approximately 80% of COVID-19 deaths occur in people over age 65, it fails to state that, in a given year, almost 75% of all-cause mortality occurs in the same age group.

Exploring the data for those ages 25 and up shows that people ages 75 and over account for 59% of all COVID-19 deaths and 56% of all-cause mortality – not far off. This virus is not only a worry for older people, it affects younger adults in a similar proportion to other causes of death.

What this means is that the target life insurance-buying population (people ages 30-60) should be very interested in purchasing life insurance to protect against this and future pandemics. COVID-19 increases mortality for adults of all ages at similar percentages. However, this very important fact is not widely broadcast in the news. And the life insurance industry has remained relatively silent on this topic, as evidenced by the continued flat sales of life insurance during the pandemic.

In the largest life insurance market in the world, the U.S., premium sales in 2020 actually dropped while number of policies showed a slight increase. Considering that there are no infectious disease exclusions in the vast majority of life insurance policies and that the world is in the midst of the worst pandemic in the past 100 years, one would think that sales of life insurance would be skyrocketing.

Every life insurance sales person will be familiar with the term “share of wallet.” Potential customers only have so much disposable income, and only a portion of that can be allocated to life insurance. While the pandemic should certainly highlight the need for life insurance, the ensuing financial crisis brought on by travel restrictions, hotel closures, restaurant closures and other lockdowns make certain that a person’s share of wallet is more focused on food, housing, medical supplies and other essentials. Life insurance has  been moved further down the list.

A survey performed by the U.S. Census Bureau revealed that more than 60% of low-income families experienced “income shocks” during the pandemic. This includes food insecurity and delinquencies on rent or mortgage payments. The percentage is even higher for families with children (see Figure 3).

When choosing between paying rent or purchasing life insurance, there is no question at all. However, as bad as things are for these families, it will become much worse if the breadwinner dies due to COVID-19.

Figure 3: Share of Families Experiencing an Income Shock by Household Income and Presence of Children

The U.S. Congress recently passed the American Rescue Plan, which provides aid to all citizens and disproportionately helps low-income families. A family of four earning less than \$150,000 per year received \$6,400 in cash and possibly other benefits, including extended unemployment, tax credits and lower health insurance premiums.

If a family of four is earning \$50,000 per year, this is more than a 12% increase in pay — and the money has already arrived. Similar packages have been offered in most developed countries in the world that are experiencing the same adverse mortality and economic downturn as the U.S.

These low- and middle-income people are suffering from a huge protection gap. One estimate places the middle-market protection gap in the U.S. at \$12 trillion (see Figure 4). This is exactly the market that the life insurance industry has been talking about addressing, but failing to reach, for decades.

Wouldn’t this be a great opportunity to approach these people, as they receive a relatively sizable lump sum of cash? A small term policy that costs less than one-per-thousand for most of these ages would help to protect those families most in need.

Figure 4

But the window for action by the insurance industry is short, as these funds have already been distributed. This money will not sit around waiting to be spent on life insurance.

Selling pure protection to the middle markets during a pandemic is a great opportunity for the customer and the insurer. It provides much-needed protection during a time when excess deaths due to COVID-19 in the U.S. are estimated at about 16% (see Figure 5). It benefits insurers as a way to reach a market that has thus far eluded the insurance industry. And, it will help inform the middle markets of the importance of life insurance and may win over many customers for life.

Figure 5

The life insurance industry has long lived by the motto, “Let sleeping dogs lie.” During a 1-in-100-year pandemic, would it be worthwhile to attempt to make a change and tout the industry’s many benefits – especially to middle-income families? For example, would this be a good time for life insurers to contact all of their existing policyholders to remind them that policies are valid for death due to COVID-19? In-house lawyers can put in all of the caveats such as, “assuming all premium payments are current, assuming the policy is not accident-only, etc.”

J.D. Power performed a life insurance survey in late 2020 and concluded that “…a combination of infrequent client communications and a pervasive perception of high cost and transaction complexity have suppressed consumer interest and customer satisfaction with life insurance providers.”

Following the results of the survey, Robert Lajdziak, a senior consultant for J.D. Power, said that policyowners’ satisfaction with their life insurance products declines the moment the sale is completed. Lajdziak showed his surprise that this trend would continue during a pandemic and implores the industry to “rachet up” its client contact, not just its communication with agents.

To some, telling customers that they are covered for death due to disease is not necessary — but is this really the case? Just one Google search with the tagline, “Does life insurance pay for COVID-19 death?” will show how many articles have been written on this subject.

Why do customers need to get this information from a third party? While there may be risks to offering it to in-force policyholders, the benefits of this positive communication could dramatically outweigh these risks.

The life insurance industry protects policyholders from the financial hardships of premature death or disability of a breadwinner. This is especially important during a pandemic. However, sales of life insurance have been flat in most mature insurance markets for decades.

If a pandemic that is responsible for about an eighth of all deaths of people ages 25-64 cannot generate interest among the general population to purchase insurance, at a time when lump-sum stimulus payments are being made to lower-income earners, it is difficult to imagine what will cause an increase in sales. But consumers will not run to purchase this insurance. The industry must think of a coordinated, thoughtful and compelling message.

Epsilon Marketing estimated that there are about 50 million middle-market households in the U.S. A survey performed for this report revealed that reaching the middle market was a top priority for 25 of the 35 life insurance companies that responded. This survey was performed in 2014, so these companies and others had approximately seven years to work out a plan to reach this market.

Now is the time to “pull out all stops” and market aggressively. Doing that will generate sales and create an entire class of new life insurance purchasers who will be able to tell positive stories in the future. Starting this process may be as simple as communicating with existing policyholders about the benefits of their policies. Word of mouth among friends may be the best sales channel to reach the underserved middle markets and to help close the protection gap.

Selling more life insurance during a pandemic can bring peace of mind to customers and  help protect their families. Yet, with all of the talk about new technologies to market, underwrite and speed policies to customers, there has been virtually no perceptible increase in life insurance sales.

This can be easily evidenced by QualRisk’s assessment that, in 2020, all-cause mortality increased in the U.S. by 16%, but there was only a 3% increase for individual life insurance. Some in the industry may look at this as a favorable outcome. What it really shows is the vast protection gap that exists in the U.S. and in all mature insurance markets in the world. It is time to do something differently and reach underserved markets. Now is a perfect time to begin.

# Death, Taxes and Life Insurance Trusts

Things as certain as death and taxes can be firmly believed. Believable, too, is that life is volatile and the cost of living highly variable. Because of these things, protecting your estate from taxation is one of several reasons why life insurance exists. How you structure this protection, transferring ownership of your policy and ensuring the payment of premiums while excluding this asset from your estate, is critical. That you act is critical, as the Biden administration wants to change major portions of the estate tax.

To start, the Tax Cuts and Jobs Act (TCJA) of 2017 exempts estates valued at up to \$11.7 million. Whether life insurance proceeds are part of the taxable estate depends on who owns the policy at the time of the insured’s death. If you want to preserve your legacy, the owner and beneficiary of the proceeds from your life insurance policy must be another person or legal entity.

Choose wisely, because the owner of the policy is the person who is responsible for maintaining the policy. Because you do not want the policy to lapse due to failure on the owner’s part, or if the owner is a minor who is not able to pay the premiums without the approval of a legal guardian or trustee, make sure procedures are in place — perform the necessary due diligence — to make ownership convenient and secure.

An irrevocable life insurance trust (ILIT) is another means to a similar end, regarding estates and specific tax thresholds. In this case, the policy is owned by a trust. The proceeds are not part of your estate, nor are you a trustee in charge of the trust. You do not retain any rights to run or revoke the trust. The advantage here is the assurance that what must be done will be done, that premiums will be paid without delay, that the trust will honor its legal responsibilities.

An estate planning adviser can also determine if you can transfer money — funds relating to gifts — to the trust, thus reducing whatever taxes your estate may owe.

If the beneficiary is a child or an adult with special needs, an ILIT lets you name the trustee — a person you trust — to whom you entrust the handling of money on behalf of your child or children, according to the terms of the trust document.

In a word, documentation is key to any estate plan.

Documentation is verification of trust, affording you the peace of mind you deserve. Regardless of who owns the policy, whether the owner is an individual or an institution such as a legal trust, proof is in the paperwork; legal documentation is proof of ownership.

Do not tarry in attending to this work, lest the government be fastidious in its work of taxing the proceeds of your estate.

Trust, too, that the government will tax your estate unless you safeguard your estate.

For the good of your estate, with the opportunity for future generations to continue to do good, do what is right.

Exercise the rights life insurance provides.

# What Is Happening to Life Insurance?

This article was written by Ronnie Klein for the International Insurance Society, a sister organization of Insurance Thought Leadership, under the umbrella of The Institutes. To see more IIS articles by Ronnie and other IIS experts, visit internationalinsurance.org.

What is happening in the world of life insurance?

The Hartford discontinued sales of individual life insurance policies in 2012.* MetLife spun off its life insurance business into Brighthouse Financial in 2017. VOYA Financial exited the individual life insurance business in 2018. AXA sold its share in Equitable, its U.S.-based life insurance business, in 2019. AIG announced that it will split off its life and retirement business in 2020. Prudential plc, of the United Kingdom, announced the demerger of Jackson National Life, its U.S.-based life and retirement business. The American firm Prudential Financial announced that it will sell its retirement business and is considering further “de-risking” of its annuities and other products. And these are just a few of the announced divestitures from the life insurance business by major insurers.

Is the sale of individual life insurance coming to an end? Insurers are certainly still selling it, but in this lingering environment of ultra-low interest rates, pressure is mounting from shareholders to sell off all or certain blocks of life insurance. That is why one prominent insurer’s CEO said, “I think that life insurance is a mutual company product.”

Not only are low interest rates making it difficult to earn a decent return on these products, but some insurers also have products on the books with minimum guarantees that they just cannot keep up with any longer. To add insult to injury, insurers must also hold regulatory capital against these policies and manage costly legacy administration systems. Announced changes to insurance regulations are tending toward increasing regulatory capital for long-dated guarantees, rather than decreasing it. Updating systems for old insurance policies does not seem like a good use of shareholder money.

Shareholders Demand Better Returns

Shareholders are becoming increasingly vocal about the returns on capital for life insurance. This is especially true for companies that must adhere to Solvency II regulations, which require insurers to hold excessive capital in support of long-term guarantees. A combination of low yields on assets and overbearing capital requirements makes life insurance increasingly difficult for stock insurers to maintain. One prominent board member of a life insurance company aggregator said the insurers that do not sell certain blocks of life insurance business “run the risk of activist investor action.” While life insurance is generally thought of as a long-term business with many policies in force for decades, activist investors generally represent investors with much shorter time horizons. This mismatch of expectations can wreak havoc for life insurers and their policyholders.

The life insurance industry has focused on Baby Boomers for decades, and for good reason. Baby Boomers still hold over 50% of total household wealth (see Figure 1). This large group of people born between 1946 and 1964 purchased pure protection products to pay off mortgages and college costs for their children in case of premature death. Then they purchased life insurance savings products as they advanced in age and became more affluent. Then they purchased annuities to protect against outliving their retirement assets.

However, this era is coming to an end, as the youngest Baby Boomers are now in their late 50s and most are well into their 60s and 70s. Life insurers now realize that they have to invest in new technologies to attract other demographic groups, such as millennials. Freeing up large amounts of capital backing life insurance products to invest in technology seems like a better use of this money — and it is what shareholders are demanding.

The life insurance business is still extremely important and will continue to be so. It protects breadwinners from the financial consequences of premature death, disability or outliving their assets. According to the Financial Stability Board, insurer assets in 2019 amounted to \$35.4 trillion. In 2016, the International Monetary Fund estimated that 85% of insurance assets can be attributed to life. That means that the life insurance industry is responsible for approximately 7.5% of the \$404.1 trillion of financial assets worldwide. Not too bad for an industry that seems to be selling off its businesses.

Not only does the industry invest these assets into corporate bonds, infrastructure and government bonds, but benefit payments in the U.S. alone amounted to over \$530 billion. The life insurance industry continues to be a noble undertaking.

Divestiture Strategies Vary

Insurers can use several different methods to offload blocks of life insurance business. They can stop writing new policies and manage the old policies as a run-off business. They can reinsure the old policies but continue to service and administer the policies. They can spin the business off into a separate company. They can reinsure the business and transfer the servicing and administration. Or they can sell the business to another organization, most likely to an aggregator. Each technique has its benefits and drawbacks, and hybrids may also be used. This paper will focus on the aggregation model, which has become more prominent during the past few years.

Through economies of scale, aggregators service and administer policies and may be able to invest a bit more efficiently than the seller was. Recently, the aggregator business has become quite competitive, with many new entrants, especially in the U.S. market. Aggregators can also domicile in jurisdictions with the most favorable capital requirements for their specific business models, thus reducing regulatory capital and increasing returns to shareholders.

The economics for this type of business seem to be working for both buyers and sellers, but what about the policyholder? This is exactly what insurance regulators around the world are exploring. With the increase in activity, regulators are “looking into the financial, operational and investment risks associated” with these transactions, according to recent conversations with four regulators. They are also concerned with policyholder protection. However, the chair of the board of a major aggregator recently said that regulation is “driving this business, not impeding it.” The president of another aggregator said that, as long as there is “sufficient capital to back the policies, regulators are happy.”

But there is more to in-force life insurance than simply paying benefits. Policies need to be updated as family circumstances change. If an aggregator is running off a block of business, the policyholders may not be receiving important services they need to keep their policies up to date. Aggregators will say that they actually do a better job servicing the policies because run-off is their core business. Their systems are newer and designed specifically for this business model, and the aggregators do not have new sales to offset lapses. Therefore, they need to maintain or improve persistency to meet shareholders’ expected returns.

Because most aggregators do not offer new policies, many policyholders may not be offered updates in coverage to meet changing needs in their lifecycles. The selling company will say that its agents and brokers will continue to treat these policyholders as customers, but regulators are becoming wary. One prominent European regulator said he would not approve the sale of a block of life insurance business when a third party services the policies. This regulator believes that the biometric and policyholder-behavior risks need to be with the same company as the administration. This, however, is not the norm in the U.S. or even other parts of Europe.

Another issue raised by regulators is the large — and growing — life insurance protection gap. Swiss Re estimates that the global mortality gap has reached \$408 billion in 2020, a 6% increase from 2019. It seems unfathomable that the protection gap increased during a pandemic, when people were focused on their own mortality and that of family members. Others will argue that the pandemic impeded agents’ ability to sell policies by making it difficult to schedule paramedical exams and keeping people out of the office.

However, many insurers increased non-medical underwriting limits, making it easier to purchase life insurance without any additional exams. The Life Insurance Marketing and Research Association (LIMRA) announced that, while new life insurance policy sales in the U.S. increased 2% in 2020, annualized premiums dropped 3%. People were definitely considering purchasing life insurance during the pandemic, as the Medical Information Bureau (MIB) showed an increase in applications during 2020 (see Figure 2), but many did not complete the purchase. Some refer to this as the intention gap, another disturbing trend that needs to be addressed. Flat life insurance sales during the worst pandemic in 100 years is disappointing, nonetheless.

Technology Can Help

There has been a lot of talk in the industry about technology. Life insurers are investing millions of dollars and dedicating much time to start-up companies that claim to issue policies in minutes and to have developed more efficient underwriting and better fraud management. Willis Towers Watson (WTW), in its “Quarterly InsurTech Briefing Q1 2021,” announced that investment in insurtech for Q1 2021 reached a record \$2.55 billion, spread over 146 deals (see Figure 3). About 31% of this funding is associated with the life insurance industry. WTW says that it will soon have to drop the term “insurtech” as these new technologies are becoming the norm. Even with the multitude of start-ups and insurtech investments, worldwide life insurance sales have been flat at best. Will these new ideas eventually gain traction that turn into tangible insurance sales?

One area of increased interest is in the field of artificial intelligence (AI). However, this technology is not as advanced as people might believe. Try asking an automated assistant to dial the phone of a friend with a foreign name. Sometimes, no matter how many times you say the name, the assistant just cannot understand it — until you receive a response such as “Ordering pizza.” (Although nice, hot pizza may take your mind off of whomever you were trying to call.)

In the insurance industry, AI has mainly been used for non-life insurance — particularly in fraud detection. With vast amounts of data now available, machines can comb through seemingly endless numbers of claims to search for patterns in suspicious claims submissions. Machines can find certain repetitive behaviors not easily discovered by humans. Not only can claims managers use AI to assist in identifying potential fraud, AI can also help find ways to prevent fraud.

AI is also being used more and more in the field of auto insurance, especially with telematics and autonomous vehicles. A newer use of AI is to match up a caller with the correct servicer. Using data such as previous issues, age, location and policy type, machines can learn how to increase sales and decrease lapses. Call-center activity is vitally important to the success of auto insurers, yet this activity is typically delegated to operations or IT. Perhaps it is time to realize that call centers should be under the control of the sales team.

For life insurance, the only real use of AI has been in the field of medical underwriting. Risk assessment is probably the most important aspect of life insurance, and companies spend a lot of money choosing their risks carefully. This typically involves costly paramedical exams, blood tests, nonmedical questionnaires and perhaps stress tests. These tests are not only expensive, they are time-consuming and can severely delay the delivery of a policy. Agents complain that lengthy delays in policy issuance are a major cause of non-taken ratios — which could increase the intention gap. Using AI to select risks more quickly and without time-consuming and expensive exams could lower prices and speed delivery of policies. This can help close the intention gap and increase sales.

Another use of AI for life insurance could be for in-force management. Given the robust market for blocks of in-force life insurance business and the continuing need for protection, it may be time for a change to the current business model. Imagine using AI to examine in-force policyholders and determine which were in need of policy changes — increase in face amount, sale of new products (annuities, long-term care, disability, etc.), decrease in face amount (could prevent an imminent lapse and help build customer loyalty). Using AI as a tool to assist agents in identifying customer needs could be very powerful.

Aggregators could use AI to sift through in-force life insurance policies to determine which are best-suited for policy changes. If the aggregator does not issue new policies, it can contract with third-party insurers to write the new policies and receive a commission. This would be good for all parties. The aggregator makes extra returns for its shareholders by marketing a highly valuable asset — its policyholders. Insurers have a great source of new business — people who have already purchased life insurance and who have been identified by AI as likely to purchase additional insurance. AI companies can sell their software to aggregators and insurers. And, most importantly, policyholders are given the opportunity to purchase important products to help secure the financial well-being of their families.

Conclusion

Life insurance is a very involved business. Insurers must develop complex products that can last more than 50 years. Then they must market and sell these products using an array of channels. Applications must be underwritten carefully to mitigate the risk of anti-selection. Once a policy is sold, it must be administered, which includes allowing for a host of policy changes. Reserves and capital held against these policies must be invested prudently, according to strict regulatory guidelines. Claims and other benefits must be paid with a watchful eye for fraud.

Traditionally, these completely different competencies have typically fallen under one roof. But there seems to be change in the wind. With a combination of a low-interest-rate environment, the Great Recession, a once-in-100-years pandemic and stricter regulation, it is becoming more and more difficult to manage all aspects of life insurance while meeting shareholder expectations. The life insurance industry is decentralizing before our eyes. It is too early to say whether this new approach will succeed, but, if interest rates remain at record lows, the odds of this happening increase.

Regulators will continue to scrutinize this evolving business model with the goal of protecting policyholders. The worst thing for a policyholder, insurer and regulator is for a life insurer to be unable to make a claim payment, especially if the policyholder has been paying premiums for 30 or 40 years. One default could destroy the entire model.

The sale of individual life insurance may well be best-suited to mutual companies, but the new model that is emerging might be well-suited to insurers, aggregators, shareholders, regulators and, most importantly, policyholders. Bringing the many activities that life insurers currently perform under one roof to separate companies that excel in one or two of these competencies may be the wave of the future. New technologies such as AI can assist in meeting policyholder needs. Regulators will have to show some flexibility and patience. It will be very interesting to see how the life insurance industry evolves.

Who said the life insurance industry is dull?

*This article originally said the Hartford had discontinued sales of life insurance. In fact, while it no longer sells individual policies, it still provides group policies.

# Long COVID – a Troubling Legacy

Sufferers of long COVID are often referred to as “long haulers” because symptoms can last for weeks or even months. And it is not just a person’s health that is affected for the long-term; there are many other knock-on impacts of extended symptoms, such as impact on life insurance, that industries will now have to consider and adapt to.

Much remains unknown, but the first step to navigating this new territory, for life insurance is to understand the data we do have so far.

Symptoms of long COVID

What do we know about long COVID?

We know that symptoms — shown in Table 1 below — may occur continuously or in a relapsing pattern. The symptoms may simply persist for a long time following the initial infection of COVID-19, or, over time people may experience new symptoms.

Interestingly, by far the majority of patients with long COVID test negative for the virus, indicating microbiological recovery. As such, the causes of long COVID remain uncertain. Possible explanations include organ damage from the virus, exaggerated immune or autoimmune responses and persistent but undetectable viral reservoir.

Classification of long COVID

Experts have also started to classify long COVID in two different stages. The first, referred to as post-acute COVID, applies to cases where symptoms persist for more than three but less than 12 weeks after the initial infection. The second, called chronic COVID, applies to instances where symptoms persist for more than 12 weeks following initial infection.

Experts also suggest that an alternative way of classifying long COVID is according to the predominant residual symptom experienced. Based on this approach, sufferers can be classified as having post-COVID cardiorespiratory syndrome, meaning likely to suffer with breathing problems; post-COVID fatigue syndrome, meaning likely to feel persistent low energy levels; or post-COVID neuro-psychiatric syndrome, meaning likely to experience cognitive dysfunction such as depression, anxiety or brain fog.

Risk factors for long COVID

What do we know about who is most likely to develop long COVID?

Data suggests that patients hospitalized during the initial COVID-19 infection have an increased risk of developing long COVID (87%) compared with those treated with outpatient COVID-19 (10% to 35%). Hospitalized patients are also more likely to sustain organ damage from their initial infection, leading to prolonged symptoms.

What’s more, the number of symptoms presented at the time of initial infection appears to predict the likelihood of a person developing long COVID. The more symptoms at initial infection, the higher the risk of developing a long COVID syndrome of some kind.

Long COVID is more commonly reported in adults aged 50-plus, although it can occur in any age group, including children.

Individuals with co-morbid disorders, and in particular co-morbid psychiatric disorders, such as depression or anxiety, have an increased risk of developing long COVID after infection. The more co-morbidities, it appears, the higher the risk.

Long COVID and Morbidity

The link between long COVID and morbidity must be continuously assessed. At this early stage, not enough data exists to provide a clear understanding.

That said, wide varieties of new-onset pulmonary and extra-pulmonary disorders, meaning conditions associated with the lungs, have been observed in long COVID patients, including interstitial lung disease and respiratory failure. Table 2 shows a list of the extra-pulmonary conditions associated with long COVID.

Additionally, according to a recent longitudinal study of more than 73,000 U.S. veterans with a history of outpatient COVID-19 infection, there was an increase in observed short-term mortality at six months, when compared with veterans with no history of COVID-19 infection. However, the picture is far from complete, and more research is required for an accurate understanding of the mortality associations of various long COVID syndromes.

Evaluation of long COVID for life insurance purposes

When it comes to evaluating the associated risks of a person experiencing long COVID, the predominant residual symptom profile should be used to guide the evaluation. For example, if the predominant symptoms presented are shortness of breath and chest pain, cardiorespiratory investigations such as lung function tests, EKG, echo or chest imaging should be conducted.

For more general symptom profiles, blood and imaging tests will need to be conducted, guided by clinical assessment, and may include tests such as complete blood count, liver and renal function analysis, urinalysis, D-dimer assay testing (which screens for clots or deep vein thrombosis), inflammatory marker testing (which evaluates the presence of inflammation) and NT proBNP testing (which detects signs of heart failure).

Underwriting considerations

When it comes to life insurance underwriting, there is some early-stage guidance to help navigate this new territory. One of the most important factors to consider is adjusting ratings in the case of any evidence of organ damage. To date, though, for sufferers of long COVID with no evidence of organ damage, there does not appear to be any significant excess mortality risk to take into account when underwriting.

As with any emerging condition, the picture we have today, and the industry’s understanding of risk, will become a lot clearer in time. What’s needed now is continued study and analysis of patterns so new underwriting rules can be developed. One thing is for sure, though: The COVID-19 virus is leaving a troubling legacy.

# Breathing Life Into Life Insurance

For too many years, life insurance has effectively been death insurance, focused primarily on paying out lump sums on a policyholder’s passing. Reimagining this long-standing approach – and putting the life back into life insurance – starts with harnessing insurance as a tool to enhance policyholders’ physical, mental and financial wellbeing.

How can the industry meet this challenge?

Well, at YuLife, we’re transforming group life insurance into a suite of wellbeing and insurance products – a paradigm shift toward a model that simultaneously supports members, insurers and employers. Members benefit from improved wellbeing, while insurers gain from an approach that de-risks policyholders via healthy activities and employers gain the esteem of their employees by offering a product that offers tangible value to their lives – making for a happier, healthier, more productive workforce.

At YuLife, which recently completed a £50 million Series B round, policies come with the standard features of group life but add critical illness, income protection, virtual general practitioner (GP) services and employment assistance such as counseling and coaching. Based on the latest behavioral science, artificial intelligence and game mechanics, policyholders are offered discounts and vouchers from leading brands, including Amazon, ASOS and Avios, in exchange for completing everyday wellness activities like walking, cycling, meditation and mindfulness exercises. Many policyholders lead healthier lives while safeguarding their loved ones’ financial future. None of it would be possible without the intelligent, efficient and purposeful use of technology.