HOUSTON - More people have started buying life insurance since the pandemic began. Life insurance agents tell us sales are up because people want to protect their families if they should die from COVID-19 or lose their jobs.
Applications for life insurance rose 3.4% for people under age 44 in the first half of the year, according to the MIB Life index.
"As we witnessed in 2001 after 9/11, as families spend more time together, they start to appreciate the value of all the family members," said David Farabee, President of the National Association of Insurance and Financial Advisors of Texas.
Insurance agents say more people are buying life insurance, not just to help their survivors pay bills after their death, but because they can borrow against some policies if they lose their jobs.
"It's a place you can probably turn to keep the lights on and pay some bills, and then repay that loan when times get better financially," said Farabee.
There are two types of life insurance: Term Life and Permanent Life.
Term Life covers policyholders for a set term, such as 10 or 30 years, perhaps until a mortgage is paid off, or a child is grown.
"You know you have a kid that's ten years old and you want to make sure you can take care of your spouse and child for the next 14 years to see them through college," said Danny Ratliff with RIA Advisors.
Term Life policies can usually be converted into permanent policies later, which include universal, variable, and whole life insurance. Permanent life insurance costs more, but can sometimes be used to cover long term care for the policyholder, or to cover funeral costs, family bills, or even things like inheritance tax for their heirs.
"Let's say I have three small children. Let's say I want to make sure that I leave them an amount when they reach a certain age. I can put together a life insurance policy that would let me dictate that," said Ratliff.
Nerdwallet says the average annual cost of a $500,000 20-year Term Life insurance policy for a healthy 40-year-old woman is about $200 a year. Whole life would cost her $4,800 a year.
Many employers offer group life insurance while you're employed with them, so check your coverage there first.
Life Happens offers this calculator to help you determine how much coverage you might need.