Digital-first life insurance policies see increase in demand, Policygenius

There has been significant growth in no-medical exam life insurance policies, according to the 2022 Policygenius Life Insurance Trend Report. 

The demand for digital-first life insurance products has grown in the last year, likely related to the COVID-19 pandemic. From October to December 2021, about 56% of applications submitted through Policygenius were for no-medical exam policies compared to January to March 2021, which was only 26%.

The report includes data from the top 10 insurance companies offered through the Policygenius marketplace, a platform for consumers to compare carriers, receive advice and buy policies online.

"To keep up with our customer demand, we went from having three no-medical exam life insurance options in early 2020 to seven in 2021, with more on the horizon for 2022," said Eloise Spinello, associate director of account management at Policygenius, in a statement. "More insurers are adjusting to demand by offering no-medical exam options that account for all health classes as well, rather than reserving these options for only the healthiest applicants."

Historically, the majority of people who purchased life insurance have done so in person with an agent but as the use of technology has increased people have shown an increased interest in online purchasing options.

In 2020, only about 42% of people preferred to buy life insurance in person, according to the 2020 Insurance Barometer Study from LIMRA. Almost 30% of consumers are interested in online purchasing options, according to the study.

Data shows that no-medical exams term life insurance policies are priced comparably to term policies requiring a full medical examination, some policyholders paid less, according to the Policygenius Life Insurance Price Index. As consumers age, the price of life insurance goes up no matter if the policy requires a full medical examination or is a no-medical exam policy.

“Instant decisions are a big factor for some of our customers. Other customers mention upfront that they don’t want the medical exam, so that’s another major driver,” Spinello said. “Even when no-med policies are slightly more expensive, say $5 to $10 more per month, customers are still opting for those because of the quicker turnaround time.”