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US life insurance companies paid out record $100 billion in 2021

by Karen Faulkner, Worthy News Correspondent

(Worthy News) – US life insurance companies paid out a record $100 billion in death benefits in 2021, most likely because of the COVID-19 pandemic, the Wall Street Journal reports.

The number of Covid-19 deaths in the US rose by 20% last year to approximately 460,000, according to the Centers for Disease Control and Prevention (CDC).

The American Council of Life Insurers said death-benefit payouts increased by 11% last year to $100.19 billion, WSJ reports. This increase followed a 15% year-over-year rise in 2020, when death-benefit payments reached $90.43 billion.

The year-over-year increases in death-benefit payouts are among the highest since the 1918 flu pandemic and far above the 4.9% average from 2011 to 2021, WSJ reports. Primerica told WSJ that companywide death-benefit claims increased about 34% in 2021 to $2.25 billion, up from $1.69 billion.

In a statement to WSJ, ACLI vice president Andrew Melnyk said annual filings by insurers to the state department did not list causes of death but that it is “reasonable” to assume much of the increase in payouts is due to the pandemic.

While COVID-19 Delta variant deaths caused an increase in payouts under employer programs in 2021, the bulk of the $100 billion payout came from individually owned life insurance policies, WSJ said.