Pandemic Spurs Young People to Buy Life Insurance
This week, we talk about how life insurance applications have leapt among younger people and the latest in the day trading mayhem.
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Hi, Maitane. Let’s talk about one of the latest consequences of the coronavirus: More young people are buying life insurance.
It makes a lot of sense when you think about all the tragic deaths we have seen. That has helped overall applications for life insurance jump 4% in the U.S. last year, the highest year-over-year growth since insurance member-owned organization MIB Group began tracking the market in 2001.
The pop in applications was driven by people aged 44 and younger. MIB says applications for people under age 45 grew 7.9%, versus 3.8% for people aged 45 to 59 and a small decline for those 60 and older.
At Northwestern Mutual Life Insurance, new sales premium topped $1 billion for the first time. Some insurers have made applications easier during the pandemic, offering virtual seminars and relaxing requirements for blood and urine samples.
It marks a turnaround from earlier in the pandemic when life insurances applications were shrinking. Now let’s move to the latest we’ve seen in the market mayhem.
Silver. The precious metal was the latest asset in the sights of day traders on Reddit this week. On Monday, silver futures posted their largest one-day high in 10 years after many investors thought online traders would try another “short squeeze,” like they did with GameStop. A short squeeze happens when a sharp rise in price forces short sellers to buy it back to minimize their losses. In a short sale, traders borrow shares from the broker-dealer and sell them, hoping to buy them back for less in the future. This is how short sellers profit when a company’s share price falls.
The surge in silver prompted exchange operator CME Group to impose stricter margin requirements on silver futures. (Futures are contracts that oblige you to buy something at a certain price.) That made it more difficult for smaller investors who are using borrowed money to raise cash they can deposit with brokers. Then on Tuesday, silver tumbled 10% and the iShares Silver Trust, the largest exchange-traded fund tracking the metal, fell 8.3%.
What am I looking at? The chart above shows the performance year-to-date of BlackRock’s iShares Silver Trust, a $18 billion exchange-traded fund that experienced historic inflows in recent days as Reddit traders moved toward silver.
GameStop’s shares have plummeted more than 50%, but that doesn’t mean the influence of day traders is going away anytime soon. We’ll keep an eye on Reddit traders’ next targets.
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Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy