We are currently living in unprecedented times. COVID-19 swept through the nation and has changed our priorities and our way of life. One thing you may not be thinking about is how COVID can impact your current life insurance policy, or your ability to get a life insurance policy.
Getting Life Insurance During COVID-19
The first thing to know is that you can still buy life insurance during the coronavirus pandemic and, in some ways, the process may be a bit more lax. Just like the rest of us, insurers are honoring the CDC’s social distance guidelines. This means that getting an in-person urine test, blood test, or a weigh-in isn’t entirely possible now, so there are fewer potential reasons to reject applicants for coverage.
In fact, 1-in-5 US companies have waived or postponed paramedical requirements during COVID-19, and more than a quarter of US insurers have expanded their automatic underwriting processes.
This doesn’t mean you’re entirely off the hook with traditional underwriting procedures; however: applicants are still expected to fill out an incredibly thorough health history questionnaire so that insurers can accurately evaluate their risk factors. Additionally, we do not yet know what those covered during COVID will need to complete once CDC guidelines are eased/after the pandemic has ended.
Your Coverage Options During The Coronavirus Pandemic
Some insurers are adjusting their policy offerings and coverage options, based on term of coverage or age. Per a recent Reuters article, Prudential Financial suspended 30-year term life applications.
Additionally, Penn Mutual Life Insurance and Mutual of Omaha Insurance suspended applications for individuals 70 or older – the most at-risk group for COVID-19-related-fatalities. Other insurers have decided to temporarily suspend policy applications for those in their 60s who were previously approved for coverage with health issues like diabetes and asthma, as these health issues make them at risk for COVID.
Your risk and rates are determined based on health-related data and long-term mortality. Coronavirus data has yet to be studied long-term (it’s only been a few months), which means these shifts in coverage and underwriting guidelines could be temporary.
This is good news for those looking to get coverage, as the industry cannot yet set tough restrictions on pre-existing conditions or age. If you are a senior looking for life insurance during this time, give us a call! We can help you review your options with top life insurance carriers.
One thing to keep in mind is there is a higher expectation for honesty on your life insurance application. Just because you are not expected to physically undergo a blood or urine test, does not mean you may not eventually be expected to pass one. What’s worse: if you have lied on your life insurance application your family will not be able to receive coverage.
So: What Impacts My Ability for Life Insurance Coverage?
While permanent restrictions surrounding life insurance coverage with coronavirus may not be put in place for a while (if at all), there are a few things that could impact your ability to get coverage.
You can expect that your application will include travel-related questions: where have you traveled and where do you plan on traveling. Because underwriters base the cost of your premiums on risk, certain areas of travel are going to be considered more high-risk. This is more of an issue as countries ease lockdown restrictions. A good rule of thumb is to postpone or cancel travel to any country deemed high-risk by the CDC. You can find a list and travel recommendations here.
Some insurers have added questions on COVID-19 exposure and travel in order to more accurately assess your risk as a client. PLanned or recent travel to any country with large outbreaks could result in a delay in coverage or the denial of coverage. Of course, this all depends on the company with which you’re applying.
Should you choose to travel outside of the country during this time, you can most likely expect to delay the application of coverage for at least 30 days following your return. This is to ensure you have not contracted the coronavirus during your travels.
Despite all of this, the life insurance industry has actually seen an increase in business. From an underwriting perspective, it may never be easier to get a life insurance policy! If you and your family need a life insurance policy – or you need to reapply because your term is ending – there is no reason to not apply right now.
If your life insurance company has waived in-person medical exams, your approval time may even be shorter than usual! Give us a call to see what this means for your individual application process.
What About My Existing Life Insurance Policy and COVID?
Your current life insurance policy may actually cover a COVID-related death. If your policy is in good standing, your beneficiaries may still receive your benefit, although there are a few exceptions.
- Accidental death policies do not cover death by disease. In some cases, this is contestable, if an injury-induced hospitalization causes the catching of a disease, but you should be sure to review the specifics with your agent.
- Contestability periods will still be in effect for COVID-related deaths. This means your insurer can investigate and potentially deny claims surrounding your death. Again we want to stress the importance of honesty on your application: if you were found to be lying on your application, it will be considered fraud and the coverage for you and your family will be denied.
When applying for life insurance coverage during the coronavirus pandemic, it’s important to seek the help of an expert. Our independent agents have worked with multiple companies and have seen almost every life insurance situation there is. This means that, even if you have pre-existing conditions, we can help you find the best coverage for you and your family – even during a pandemic. Give us a call today to see how we can help you find a life insurance policy during the COVID-19 pandemic.
In general, provided you’ve been honest on your life insurance application and are current on your life insurance premium payments, you should be set. “Once you’ve secured a life insurance policy, you’re covered. It’s not going to affect your current coverage at all,” Luckey says.