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Mar 14, 2020, 10:45 AM
The coronavirus is making people think about life insurance coverage, and if they need it.
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In a global health crisis, life insurance can be confusing. Will it still cover you if anything happens? And, is it too late to sign up?
You're not the only one with life insurance on the brain.
Anyone who already has life insurance doesn't need to worry about their policy — it's already in place, and no virus could change that.
If anything should happen to you, your policy will cover it. Nothing will change, and so there's no need to worry. Even if you're in an affected area, your policy and monthly premiums aren't likely to change — the rate you have is locked in for the entire term of your policy.
Insurance prices are constantly fluctuating, due to many factors. While life insurance would certainly be impacted by an influx of fatalities, its prices can also vary based on the market and interest rates, which play a big role in how life insurance companies make money through investing.
Tim Zawaki writes for S&P Global's Market Intelligence that record-low interest rates could pose a threat to the life insurance industry, affecting its investments and ultimately its profitability. But, he writes, it is still too early to say just how much it could jolt life insurance prices for consumers, if at all.
Kade expects prices to hold steady in the short term, without much change. "If you're a healthy young person and you're applying for life insurance, your rates shouldn't be changed due to this Coronavirus," she said. "The underwriting process is the same if you apply today as if you were to have applied two months ago."
In the long term, anything could happen. But, anyone concerned about a potential future price increase could benefit from applying now.
How much does life insurance cost?
Lying on your life insurance application could cost you, and it's not worth risking your policy's validity to save a few dollars. Lies about your health or medical conditions will likely be caught, as life insurers can check medical records, and can go as far as to cancel your coverage.
While many online life insurance agents like Fabric also request travel history, Kade says that it's not tied to the virus. "This question predates any of the Coronavirus concerns," she says. For Fabric, Kade says that answers to this question are more about the amount of risk posed by traveling and that certain destinations that are higher risk than others.
Lying on the travel history portion, or any other portion, of your application, could constitute fraud. You're better off telling the truth.
As always with life insurance, you'll want to shop around and make sure you're getting the best possible deal. Each insurance company considers your information differently, and companies price your policy depending on your risk profile.
To avoid paying more than you should each month for your policy, get quotes from several different insurance companies or online life insurance agents. Compare them to find the most coverage for the least money, and you'll find the one that's the best deal for you.
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