The coronavirus pandemic has caused many people to re-assess their need for life insurance, along with other types of insurance such as long term care insurance and the adequacy of their health insurance.
Life insurance ensures surviving family members are provided for financially after someone’s death. There have been some changes in the application process for life insurance policies, and the good news is it’s still possible to get a policy.
In some ways it may actually be an easier process. According to Bankrate, “Because many people (and insurance companies) are honoring the CDC’s social distancing guidelines, in-person blood or urine tests and weigh-ins aren’t possible now. That means insurance companies currently have fewer potential reasons to reject applicants for coverage.”
“To make it easier for consumers to apply for a policy under these unusual circumstances, more than a quarter of U.S. life insurers have expanded their automated underwriting practices,” says Catherine Theroux, director of public relations for LIMRA. “One in 5 U.S. companies have postponed or waived paramedical requirements.”
Folks applying for life insurance however, are still required to provide a complete health history, allowing the company to analyze the insurability of the individual.
Some insurance companies are changing their offerings and limiting their coverage options based on age or the term of the coverage sought. For example, Mutual of Omaha Insurance and Penn Mutual Life Insurance have temporarily suspended applications for individuals aged 70 or older. Some other insurers are also temporarily suspending life policy applications for people in their 60s who might previously have been approved for coverage despite health issues like diabetes and asthma.
We believe that now is actually a good time to apply for life insurance, because it might possibly be the easiest process from an underwriting standpoint. If you believe a life insurance policy will protect you and your family, there really isn’t any reason not to apply now. Our insurance experts can help find the company that best meets your needs.
What about an existing policy and coronavirus coverage?
For the most part, existing policies will cover a person if they were to die from COVID-19. As long as your policy is in good standing, it will provide a death benefit to your beneficiaries. Just be sure not to let your current policy lapse. However, here’s a few exceptions to keep in mind:
- The life insurance industry has something called a “contestability period,” a window of one or two years during which an insurer can investigate and deny claims. If it’s determined that the insured lied on their application or otherwise misled the insurer to defraud them, coverage — in the case of life insurance, the death benefit paid to the family — may be denied.
- Another exception to a payout due to the coronavirus is for those who have purchased an accidental death policy. Those policies generally don’t cover death by disease. There are some exceptions, though, like if an injury causes someone to be hospitalized and the disease results directly from that hospitalization. It’s wise to discuss the specifics with your insurance agent.
If you’ve been honest on your application and current on your premium payments, you shouldn’t have any worries.
If you’d like to read more FAQs about life insurance, long term care insurance, healthcare or more, check out this article from AARP.
If you’d like to chat with a life insurance expert to analyze your life insurance (or long term care insurance) needs, talk to a RetireMentor to discuss your specific needs.