Virus-Death Surge May Mean $7.2 Billion In Life Insurance Claims

U.S. life insurers may face as much as $7.2 billion in claims if coronavirus deaths rise to the high end of projections of 150,000, according to Aite Group LLC.

The estimate includes costs for policyholders between the ages of 56 and 74, which are projected to reach as much as a combined $4.1 billion for individual and group plans, the researcher said in a study released Thursday.

Life insurers are in good shape and should be able to manage surging costs, according to the report’s author, Samantha Chow.

“There’s no doubt that they’re prepared financially,” Chow, a senior life and annuity analyst at Aite Group, said in a phone interview from Tampa, Florida. “They expect the worst and they prepare for the worst.”

U.S. deaths from Covid-19 had surged to a total near 60,000 as of Wednesday, more than double the figure from two weeks earlier.