It’s also important to note that some insurance companies are adjusting their offerings and limiting coverage options based on age or the term of coverage. For example,it has been reported that Prudential Financial would suspend taking applications for 30-year term life insurance policies from April 13 through June in response to “unprecedented market volatility.”
Does Life Insurance Cover Deaths Caused By/Related to COVID-19?
The short answer? Yes! Life insurance covers COVID-19 related deaths as long as:
- You were honest on your application. Life insurance companies can deny your claims if you don’t disclose travel plans or you lie about pre-existing medical conditions. If you are considering applying for life insurance right now, make sure you answer these questions truthfully!
- You paid your premiums on time. It’s important to pay your monthly life insurance rates on time. Missed payments can make your policy lapse, and if your policy lapses before you die, your family will not receive a payout. Many insurers are giving people extra time to pay during this pandemic. If you’re not sure you can afford your plan right now, discuss the issue with your insurance company before skipping a payment.
- You bought the right kind of policy. Accidental Death and Dismemberment (AD&D) insurance typically doesn’t cover deaths caused by illness or disease. You’ll want a standard life insurance policy if you’re worried about COVID-19 coverage.
Can I Sign up for Life Insurance Right Now?
Yes, you can currently apply for a life insurance policy. If you’re approved, your coverage will start immediately. A few things to keep in mind while you shop:
- You may need to wait. If you’ve recently traveled internationally, your insurance company may wait 30 days before approving your policy. Additionally, if you’re a more at-risk candidate (e.g. you’re older, diabetic, or overweight), you may be required to wait 90 days before applying.
- You may (or may not!) need a medical exam. Depending on your situation, a life insurance company can require you to get a medical exam before approving your application. Most companies are currently providing extra time to take your exam–a full 120 days–so you can honor local stay-at-home orders; if you have to wait for a medical exam, you may be eligible for temporary coverage in the meantime. Alternatively, you can look into companies like Bestow that don’t require any exam at all and offer instant application decisions.
- You should answer application questions honestly. You may be asked if you’ve recently been on a cruise or tested/treated for COVID-19. If that’s the case, answer honestly! Saying yes to these questions doesn’t necessarily mean you won’t be approved. Plus, your claims can be denied in the future if you’re dishonest.
- You should look for a financially-sound company. With so much upheaval in the economy, Forbes recommends buying life insurance from a company that has strong, third-party validated financial ratings (e.g. from A&M Best or Standard & Poor’s).
As the coronavirus numbers continue to grow in the U.S., life insurance companies report that applications have been skyrocketing.
With illnesses and deaths rising from COVID-19 — the disease caused by the virus — some life insurance customers have been wondering whether it’s too late to get coverage, or if existing policies cover the outbreak.
Will my life insurance rate go up?
The rate you’re paying for your coverage is locked in for the entire term of your policy, so you don’t need to worry about your premiums going up.
It’s not going to change, even with a global pandemic raging.
Be wary of any insurer offering special coronavirus coverage, or attempting to jack up your premium amid the crisis.
The coronavirus crisis will not affect your ability to apply for life insurance. However, you’ll need to provide details about your medical history and any recent travel, so if you’ve been exposed to the virus or have visited a high-risk area it may complicate your application.
If you don’t have life insurance and would like to buy some, it’s a good idea to do it as soon as possible — before you get sick.
Generally, most people under age 40 and in good health will pay lower life insurance premiums. Anyone 40 or older or who has a preexisting medical condition will pay a higher monthly premium, which is standard practice and not due to the pandemic.
Coronaviruses are a large family of viruses that are common in people and many different species of animals, including camels, cattle, cats, and bats. Rarely, animal coronaviruses can infect people and then spread between people. The new SARS-CoV-2 virus (the coronavirus which causes the disease COVID-19) is a betacoronavirus, similar to MERS and SARS. All three of these viruses have their origins in bats, according to the CDC. More information about SARS-CoV-2 and COVID-19 can be found at the CDC website.
As the number of confirmed cases and deaths continue to rise, health officials are working on all fronts to learn more about the virus and put measures into place to curtail its spread. Doctors have stated that washing your hands frequently is the best way to avoid getting sick.
The Coronavirus and Life Insurance
COVID-19: What Life Insurance Applicants Need to Know
Swiss Re, one of the world’s leading providers of reinsurance, is continuously monitoring the coronavirus situation. They suggest that insurance companies heavily lean on the current travel notices from the CDC (Centers for Disease Control and Prevention) if applicants have plans to travel internationally.
As an applicant, traveling to destinations on the CDC’s list restricted list can impact the life insurance application process. The CDC currently lists China, Italy, Iran, and South Korea as level 3 travel warnings, meaning that individuals should avoid any nonessential traveling to these places. Translation: if a life insurance applicant has plans to travel to a level 3 warning area, don’t be surprised if the life insurance company opts to post-pone coverage approval until some time has passed after you arrive back in the United States.
COVID-19: What Existing Policy Holders Need to Know
Once placed inforce, a life insurance policy will pay out for most types of death, including anything related to complications from COVID-19 or any other disease. The rare occasions that the life insurance policy would not pay out would be if the cause of death was suicide within the first two years of the policy being active, if you died while committing a serious crime, or if the policy includes a clause excluding a specific cause of death. For example, if you’re a racecar driver, you may opt for less expensive life insurance policy that excludes coverage for death as a result of racing.
For current life insurance policy holders, if you are diagnosed with coronavirus, your coverage will remain active. Once you buy life insurance, as long as you keep paying the premiums your coverage will stand.
No one could have predicted the outbreak of this new coronavirus. Just as no one can predict when they will die.
LIMRA has published the results of its latest survey, which sought to assess the effects of the COVID-19 pandemic on life insurers in the US and Canada.
LIMRA surveyed 47 US life insurers and 12 Canadian life insurers to find out if the insurers were making any changes to their business due to the pandemic and the resulting federal/state social distancing guidelines.
The survey generally found that there was no significant change in overall applications, but there was a shift in how customers applied for life insurance. A third of companies reported a decline in face-to-face applications, while a quarter said they saw an increase in online applications in March.
According to LIMRA’s survey, 24% of US companies that accept online/mobile applications for life insurance saw an increase in applications in March – but 56% of those that accept online/mobile applications reported no change. LIMRA also noted that the majority of companies saw no change in call center/mail applications last month.
In Canada, the majority of life insurers reported a decline in face-to-face applications. But five in 10 companies that accept online/mobile applications saw no change in their application numbers – only three in 10 of online/mobile application-accepting companies reported increases. Of the one in 4 Canadian life insurers accepting call center/mail applications, none saw any significant change in applications.
LIMRA also found that insurers were changing some of their business practices due to the pandemic. Over a quarter of US life insurers have expanded their automated underwriting practices, the survey found. One in five US life insurers have postponed/waived paramedical requirements. Some of the surveyed companies also said that they have added questions on COVID-19 exposure and travel to the underwriting process, are now requiring good health statements, accepting electronic health records, and are allowing historical exam and lab data instead of an exam. LIMRA also discovered that a “small percentage” of carriers are implementing premium limits for new coverage.
North of the border, LIMRA found that many Canadian life insurers have either made, or are planning to make, changes to their underwriting practices. Most companies are waiving paramedical requirements, while half are postponing exams until regular operations can resume.
The survey noted that Canadian life insurers are also extending grace periods, but only a few are offering other types of relief for customers financially impacted by the pandemic. LIMRA believes that this may change, since several of the surveyed companies indicated that they are still reviewing “possible changes.”