How is life insurance affected by the Coronavirus, is a question we get asked a lot these days. As the reality of the Coronavirus (COVID-19) sets in, many people who don’t have life insurance currently, are seeking to get protection fast. And the consumers who are insured are wanting to make sure that they are covered.
The good news is that if you already own a life insurance policy and you were to die from the Coronavirus (COVID-19), then your family would still receive the death benefit. But applying for life insurance can become more complicated.
Life Insurance offers protection to your family in the event of an unexpected death. When a pandemic like COVID-19 also known as the Coronavirus becomes world news, many start to consider the necessity of having a life insurance policy.
We are going to cover what a pandemic is, how life insurance companies treat pandemics, how to apply for life insurance, and if you should get life insurance during a pandemic. We hope this helps in your life insurance buying journey.
What Exactly is a Pandemic?
A pandemic is the spread of a new disease globally, while a disease that is constrained to one region is called an epidemic.
The Coronavirus is not the first pandemic the world has seen. Pandemics of the past have been particularity deadly, such as the Spanish Flu of 1918 or the more recent HIV/AIDS pandemic that has killed 36 million world wide.
Life Insurance Company’s and Pandemics
When you apply for life insurance, one of the main determining factors in how much your policy premiums will be is your health and medical history. So it is reasonable to assume that the health crisis the Coronavirus is causing would have some impact on the application process.
When there is a chance that an person’s risk of death has increased, most insurers are probably going to decline to insure or make that consumer pay a higher life insurance premium for that policy.
What You Should Expect?
Active Life Insurance Policies
There is no reason to be worried if you already have a life insurance policy inforce and you are paying the premiums. The COVID-19 will not affect your current policy. Even if you travel to regions that have been hit hard, the life insurance companies can’t change your rates or health class on an inforce policy.
If for some reason you were to die from the Coronavirus, your family cannot be denied the death benefit. While there are some exclusions associated with life insurance policies, such as suicide, there is no such exclusion for pandemics.
How Will Life Insurance Premiums Be Affected?
Just like with any other medical diagnosis, an illness’s severity can have an impact on how much your life insurance premiums will be when applying. Even though getting a virus, such as the flu, won’t cause a premium increase, any residual effects from the illness could.
Lets say you were to infected by the Coronavirus and it affected your long term overall health. This could end up to you receiving a lower rating which means a higher premium.
However, if you do get the Coronavirus and make a full recovery, when you apply for life insurance you can expect the premiums remain the same as before the virus.
If you have recently bought a life insurance policy and did not give full disclosure of your travel plans, this could be a cause for concern, especially if you traveled to an affected area of the pandemic, got sick, and died. If you were infected and lied about the illness, the life insurance company could deny the claim also.
All life insurance policies have what is called the contestability period. The contestability period which is usually the first two years of the policy, is the time frame the company has to revisit any info you may have misrepresented during the application. If you didn’t misrepresent any information then you have nothing to worry about.
Since we know idea what the long term consequences of the COVID-19 virus is, it’s lightning fast spread around the world has everyone on high alert, even the life insurance companies.
It’s likely that applying for life insurance will get more difficult as the more people become infected and more people die. Depending on the insurance carrier, there is a chance that life insurance applications could be put on hold till we get a better handle on the situation.
Right now there has been no changes to the life insurance application process based on the current situation, but some insurers are looking at each case individually and may hold off on issuing policies if any of the following occur:
- You have traveled to China within the last 30 days
- You have future plans to travel to China
- You have recently returned from Wuhan Province
- You are have recently traveled to or are planning to travel to areas more recently affected by the virus, such as Hong Kong, Italy, Iran Japan, Mongolia, South Korea, Taiwan, and Vietnam
As the impact of the Coronavirus continues to evolve, how life insurance companies approach the application process could change. But for the time being, it’s business as usual. Your best bet of getting a policy now is to shop around and cancel any travel that is not necessary.
Should I Get Life Insurance Now
The short answer is yes, but that goes for anyone that is not insured and has loved ones that depend on them. It shouldn’t take a health crisis for you to start the life insurance buying process.
So yes if you don’t have any life insurance, now is the best time to start. While there has been no changes to the current way life insurance carriers are conducting business, this could change depending on the impact COVID-19 has.
The truth is we really don’t know how the Coronavirus is going to affect how life insurance companies do business. The only thing we do know is that if you already have life insurance coverage, then you are safe. The Coronavirus can’t change the terms of your current policy. If you are not insured or underinsured, now is the time to act.
Frequently Asked Questions
Yes you can still purchase life insurance during the Coronavirus pandemic assuming you are not infected by the disease.
Yes, if you already own a life insurance policy and die from the Coronavirus, your loved ones will still receive the benefit.