Thousands of people worldwide have already died of COVID-19, the disease caused by the new coronavirus. As a result, many Americans have begun to "panic buying" life insurance, causing life insurance purchases to drastically increase.
To avoid confusion and "panic buying", we have compiled a list of questions you may have about your current life insurance policy or what you need to know when buying insurance during this global pandemic.
Will my life insurance cover COVID-19?
Yes. As long as you have active life insurance with good status, your beneficiary or beneficiaries will receive a death benefit if you die of coronavirus-related complications.
In addition, your insurance company can not change your premiums or your health rating. This also applies if you have COVID-1
- Submitted an incorrect or incomplete application. Claims may be rejected for reasons such as not disclosing travel plans or lying about weight or income. A company may refuse to pay a claim if there is false information in the application even after the two-year life insurance period ends.
- Did not pay insurance premiums. If your insurance is due due to non-payment and you die before the insurance is restored, your beneficiary will usually not receive any payment. When a premium payment is delayed, life insurance companies often offer a grace period of 30 or 31 days. Your coverage continues as long as you pay the insurer during this time. If you have problems paying, contact your insurance company before the premium is delayed. Otherwise, your insurance coverage expires until you apply for re-employment and your insurer agrees.
- Just bought an accident death policy. Accident and death insurance, or AD&D, is designed to cover accidents. It does not pay if you die of illness or disease. Sometimes AD&D coverage is added to a regular life insurance as a rider. In that case, the underlying traditional policy would still pay for a COVID-19 death.
What happens if I do not have life insurance? Can I have it during the pandemic?
Yes. Insurance companies continue to offer new lifelong life policies.
"We have seen an increase in life insurance applications, perhaps as a result of the pandemic," said Gina Morss-Fischer, a state farm specialist.  However, covering can take longer, especially if you are in a high-risk group, have recently traveled to a hot zone or have had COVID-19 yourself. It has become common for survivors of COVID-19 to have their life insurance application postponed to prove that they have fully recovered.
For example, National will consider a policy for someone who tested positive for COVID-19, but did not need to when they have been asymptomatic for 30 days. If the applicant was in hospital, the waiting time is six months, says a company chairman.
Can my application be postponed or rejected due to the pandemic?
Your life insurance application can be postponed or rejected depending on your travel plans, age or if you have received a positive COVID-19 diagnosis.
Some insurers postpone application approval if you have returned from travel outside the United States in the last 30 days or plan to travel abroad. In addition, they may defer your application if a member of your household has recently returned from traveling outside the United States. If you travel, you will be evaluated on a case-by-case basis. Each insurer has its own specifications for how they take out.
If you are elderly or have certain medical conditions that may make you more susceptible to coronavirus, you may see some recently introduced restrictions when applying for life insurance. Most life insurance companies have not changed their approach to insurance offers, but a select few have adjusted their maximum application age and insurable underlying health conditions, which may mean that you are not eligible for life insurance if you shop with the wrong insurer. Be sure to work with one of our independent advisors who will help you find an insurance company that will work with your specific profile.
How each life insurance company will process your application if you happen to carry coronavirus also varies. Insurers can defer your offer for up to 90 days or until you have fully recovered. Depending on the severity of your coronavirus symptoms, some insurers may delay your application for up to six months. If you have come into close contact with someone who has tested positive for COVID-19, you may also need to postpone your application or submit a statement on good health for a new or ongoing life insurance application.
Will my life insurance premiums be affected by the pandemic?
Like all other medical diagnoses, the severity of an illness can affect your life insurance premiums when you apply for insurance. While just getting a virus – like seasonal flu – will not lead to a price increase in your life insurance premiums, some of the long-term side effects of getting sick can.
If you were to get coronavirus and it caused long-term health problems before you applied for life insurance, you might get a lower health rating and a more expensive life insurance policy.
For the most part, however, if you become ill, make a full recovery and later apply for life insurance, you can expect that the price difference in life insurance premiums will be minimal. And, as we mentioned above, if your insurance is already in effect and you get coronavirus, it will not affect your premiums.
Will COVID-19 affect life insurance requirements in the long run?
It's too early to know for sure. Some recovered patients are said to have suffered permanent lung damage, but doctors will need more time to assess the true long-term effects of coronavirus. If there are lasting consequences, life insurance companies can incorporate that information into their warranty standards, which may affect the cost of coverage for COVID-19 survivors.
According to some researchers, it is also possible that COVID-19 may be longer than current. pandemic and join the established family of respiratory diseases that we deal with every season. Depending on how quickly and efficiently new treatments and vaccines are developed, the threat of a recurring COVID-19 season can mean higher costs in life insurance.
Does the current coronavirus pandemic make it more important to have life insurance?
We do not believe that COVID-19 significantly changes the answer to whether you need a life insurance policy. However, we believe that life insurance is necessary for anyone whose death would lead to financial burden for another person.
Those who provide care or financial support to their family members should have sufficient life insurance to reimburse that support for as long as it is needed. Married couples – even those without children – can also use life insurance to ensure that each spouse can maintain their common standard of living even if the other dies.
If you are not married and have no dependents, having life insurance is probably not necessary for you. However, keep in mind that your situation may change in the near future. If you have a parent that you expect to support in their old age or a significant other that you are planning to marry, these situations may motivate you to get coverage in advance.
Do not panic about your current life insurance or buying a new one. We are here to help.
With all the factors to consider when choosing the type of insurance you need, the amount of coverage to protect your loved ones and which insurance company is strong and stable enough to stay for the next 30 or 50 years, it can be great help in seeking advice from a licensed insurance adviser.
You should never expect to do this on your own. If this is your preference, you can certainly get coverage on your own. However, given the complexity of the life insurance market and the importance of choosing an insurance policy with the appropriate terms so that it responds when needed, you may want to consider the help of a licensed adviser.
If you would like to contact one of our licensed advisors for more information.