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Americans are ‘panic buying’ life insurance due to coronavirus pandemic

Americans are ‘panic buying’ life insurance due to coronavirus pandemic

  • Many firms have noted double-digit increases in the number of life insurance policies they’ve sold during the Covid-19 pandemic relative to last year. 
  • The increase is largely due to a fear of death and greater awareness of financial risks associated with mortality, experts said.
  • Insurance sales have been dwindling for years. In 2020, just over half of American adults reported having a life insurance policy, down from 63% a decade earlier.

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Life insurance is enjoying something of a renaissance as a result of the coronavirus pandemic.

Consumers, especially younger adults, have been buying insurance in elevated numbers since the spring, when thousands of Americans began getting ill and dying from Covid-19.

That result is logical, experts said, given the core use of life insurance: as a financial backstop in the event of death.

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For example, what if the breadwinner of a family dies unexpectedly from Covid-19? Insurance is meant to plug that immediate gap in household income.

“It’s forced the idea of financial protection and mortality to the top of mind for consumers in a way very few events have,” said Jennifer Fitzgerald, the CEO and co-founder of Policygenius, an online marketplace for life insurance.

‘Panic buying’

Insurance sales have been dwindling for years. In 2020, just over half of American adults reported having a life insurance policy, down from 63% a decade earlier.

But Google Search traffic for “life insurance” jumped 50% between March and May this year compared with the same period in 2019, said Fitzgerald, whose firm gets a large share of business from such internet

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Half of Texans are facing financial hardship due to coronavirus pandemic, survey says

Half of Texans are facing financial hardship due to coronavirus pandemic, survey says

Half of Texans experienced some kind of financial hardship because of the ongoing coronavirus pandemic, a new survey finds.

The survey conducted by the Episcopal Health Foundation highlights how the pandemic affects people across the state from different household incomes, race, whether or not they have health insurance and other factors. Nearly 1,900 Texans were surveyed.

“From being uninsured to not having internet access for online school, Texans say these non-medical factors are not only shaping how they’re dealing with the pandemic, they also could be seriously affecting their future health in many different ways,” said Elena Marks, CEO of Episcopal Health Foundation.

Of the 50% of people who experienced financial hardship, roughly 22% of Texas residents, say they are facing “severe hardship,” the survey said, and about 28% of people are facing “moderate hardship.”

Those with less than $50,000 in household income were more likely to experience financial distress than those making more than $50,000, according to the survey. A third of all people surveyed said someone in their home lost a job, business or had work hours reduced.

Those who are deemed essential workers make up about 34% of Texans, the survey said. About 43% of essential workers are Hispanic, 38% are white, and 10% are Black. According to the survey, those who hold essential jobs are more likely to receive government assistance like food programs and Medicaid, and they are less likely to have health insurance.

Medical care was postponed or skipped altogether by 36% of people since the start of the pandemic, the survey found. Most Texans say their mental health is good, but 46% are worried about how stress related to the pandemic has had a negative impact on their health.

Texas continues to have the highest rate of people in the nation without health

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IMF upgrades economic forecast but warns of long-term coronavirus damage

IMF upgrades economic forecast but warns of long-term coronavirus damage

The global economy may take a smaller hit from the coronavirus recession in 2020 than was once expected but faces significant long-term challenges that will likely widen inequality, the International Monetary Fund (IMF) said Tuesday.

In a set of new projections, the IMF slightly upgraded its outlook on the 2020 economic decline while warning that a lack of further fiscal and monetary support could cause deeper damage to the global economy.

The IMF now expects global growth in 2020 to fall to -4.4 percent, 0.5 percentage points better than its June projection of -4.9 percent. The international lender expects growth to rebound to 5.2 percent in 2021, down 0.2 percentage points from a June a projection of 5.4 percent.

“As a result of eased lockdowns and the rapid deployment of policy support at an unprecedented scale by central banks and governments around the world, the global economy is coming back from the depths of its collapse in the first half of this year,” wrote IMF chief economist Gita Gopinath in a Tuesday article

“This crisis is however far from over,” she continued. “The ascent out of this calamity is likely to be long, uneven, and highly uncertain.”

The global economy has gradually rebounded from the onset of the coronavirus pandemic earlier this year, which caused the steepest economic decline since the Great Depression.

Employment and global economic activity has begun to recover as countries adapt to life amid COVID-19, which has claimed more than 1 million lives globally and more than 215,000 in the U.S.

Gopinath wrote that “signs of a stronger recovery” in the third quarter warranted the IMF’s slight upgrade to its forecast. But she warned that the total economic blow of the pandemic would linger for years and restrain the recovery for long after 2020.


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Coronavirus Pandemic Could Pose ‘Major Resilience Test’ for Global Financial System, IMF Says

Coronavirus Pandemic Could Pose ‘Major Resilience Test’ for Global Financial System, IMF Says

WASHINGTON—Huge government spending and other steps to boost coronavirus-stricken economies have limited immediate risks to global financial stability while fueling a debt buildup that could spell trouble later, the International Monetary Fund said Tuesday.

“The COVID-19 pandemic could be a major resilience test for the global financial system,” the IMF economists wrote in the Global Financial Stability Report. “Triggers such as new virus outbreaks, policy missteps, or other shocks could interact with pre existing vulnerabilities and tip the economy into a more adverse scenario.”

Companies that borrowed heavily at low interest rates to cope with the crisis may have trouble paying their debts, the report said, increasing the risk of bankruptcies. The danger is particularly acute among smaller companies that don’t have easy access to capital markets, it said.

Under such a scenario, bankruptcies could prompt an increase in borrowing and a tightening of bank lending standards, creating headwinds to a recovery, the IMF said.

The impact could be especially severe in Europe, where small and medium-size firms account for more than half of total output and two-thirds of employments, the report said.

Thanks to the regulatory overhaul that followed the 2008 financial crisis, banks entered the downturn with strong capital and liquidity buffers, IMF economists said. Even so, they warned, the banking system in some nations may suffer “significant capital shortfalls” due to increases in defaults among businesses and households.

The IMF also addressed risks among so-called nonbank financial institutions, like asset managers and insurance companies, which have assumed an increasingly important role in credit markets.

“They have managed to cope with the pandemic-induced market turmoil thanks to policy support, but fragilities, such as liquidity mismatches and exposure to credit risks, remain high,” Tobias Adrian, director of the IMF’s Monetary and Capital Markets Department, wrote in a blog post.

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Is the Coronavirus Vaccine Market Oversaturated?

Is the Coronavirus Vaccine Market Oversaturated?

Stocks of coronavirus vaccine candidate developers have been on fire this year. If you invested in a balanced portfolio consisting of the five most prominent COVID-19 vaccine developers in the beginning of March, your total holdings would be up 164.68% as of Oct. 9. These include Pfizer (NYSE: PFE), Moderna (NASDAQ: MRNA), Sanofi (NASDAQ: SNY), Novavax (NASDAQ: NVAX), and AstraZeneca (NYSE: AZN). That means a moderate investment of $10,000 would have grown to $26,468 in just seven months, far outperforming the S&P 500‘s 20% in the same period.

In the last leg of the coronavirus vaccine race, investors now face the question of whether there’s enough room for all of the players to succeed. Investors should keep in mind that a coronavirus vaccine can be deemed safe and effective by the U.S. Food and Drug Administration (FDA) and still perform poorly in commercialization. Let’s examine the significant risks faced by all the participants in the COVID-19 vaccine race and find out the best way to invest in this young sector.

Snapshot of a vial labeled "coronavirus vaccine" alongside pills and syringe.

Image source: Getty Images.

Is there too much supply?

Assuming the top nine large-cap and mid-cap biotechs bring their COVID-19 vaccine candidates through clinical trials and earn regularly approval, they will have a combined annual production capacity of up to 8.7 billion doses by the end of next year. Right now, we need between 7.8 billion and 15.6 billion doses of a vaccine (depending on single or double dose requirements) to immunize everyone on the planet against the coronavirus.

Company Progress 2021 Annual Production Capacity Single/Double Dose
Pfizer Phase 2/3; Rolling Regulatory Submission 1.3 billion (with BioNTech) Double
BioNTech (NASDAQ: BNTX) Phase 2/3; Rolling Regulatory Submission 1.3 billion (with Pfizer) Double
CureVac (NASDAQ: CVAC) Phase 1/2 400 million Double
Moderna Phase 3 1 billion
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