Looking Forward to a Stable 2021

3 Minute Read

As the end of the year approaches most of us are thrilled to welcome the new year as 2020 was full of challenges. Each year we take a step back to reflect and prepare for the new years’ changes.

Although 2020 was definitely unique, it doesn’t mean we won’t be seeing or expecting changes in the industry in 2021. Here is a list of updates and upcoming changes to be prepared for.

1. Unisex Discounts Expiring

The biggest change that we are seeing moving into 2021 is the retirement of Principals' unisex rates or gender-neutral rates, one of the disability insurance industry’s most widespread discounts for women.

Since policy rates for males and females are different, insurance companies needed a way to bridge the difference in prices.

To combat this price gap, insurance companies offered the unisex or gender neutral discount. This helped to provide a more competitive option primarily for women that reduced their rates by 30%-50%, as you can see in the image below.

Unisex Rates Expiring

Principal announced that they will be ending the unisex rate discount on January 1st, 2021. This announcement came without much notice and obviously doesn’t give anyone much time to act.

Their guidelines say that to lock in the unisex rates for the life of your policy, they have to receive your application by December 31st, 2020.

Note: After this date, only a few, scattered options for this type of discount will remain and most women will find only higher-priced options available.

2. Stable Disability Insurance Prices

In 2020 we saw stable disability insurance prices for new policies. Based on what we saw throughout the year we do not expect policy premiums to increase.

However, while the prices currently appear to be stable, in the past we have seen increases after the new year. Price changes usually only go one direction, up!

Keep in mind, the cost of disability insurance can vary from person to person depending on:

  • Income

  • Coverage Amount

  • Medical History

  • Age

  • Health

  • Occupation

  • Discounts

  • Location

If you are expecting any changes in those areas it might be time to secure your policy now to ensure you get the best policy at the best price. By taking five minutes to fill out a quote request you can see what you would pay for your personalized policy.

3. Less Labs and Physicals Required

Oftentimes, when applying for a Disability Insurance policy, the insurance companies will ask for updated labs and physicals. With the COVID-19 Pandemic, companies began to ease up on these requirements for more minor cases due to the urgency of other matters.

Moving into 2021 we do not expect to see these requirements go back to full force meaning you still might be able to secure a policy without completing a full workup.

4. New Company Offering Own-Occupation

The Big Five companies, which are the only 6 disability insurance companies to offer true own occupation insurance, might be adding a new addition.

Heading into 2021 a new company, Mutual of Omaha, is planning on coming out with a True Own Occupation Disability Insurance policy!

Although this is seemingly good news, adding a new company in this market can come with implications for pricing. We are not sure how the other companies will respond.

5. Stable Life Insurance Prices

As far as pricing for life insurance goes, we have not seen an increase in rates at this time.

Moving into 2021 we are not expecting an increase. The biggest factor we are currently watching is the pandemic and the new vaccine.

Life insurance rates vary from person to person, similar to disability insurance rates. Life insurance rates can be determined based off of your:

  • Income

  • Coverage Amount

  • Medical History

  • Age

  • Health

  • Hobbies

So again if you are expecting any changes in those categories, get your policy secured soon.

The new year brings on new challenges and many empty checkboxes on your to-do list. All of these conflicting priorities might make it seem like waiting to apply for life and disability insurance will make things easier, but, as you can see, it may be the wrong choice for your bank account.

We hope that this information will help you to make the right choice for yourself and your future while we are quickly approaching the New Year. If you have any questions, please let us know, we are always here to help!

Happy Holidays!