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Shane Murphy
MoneyWiseMay 4, 2020
6 things you need to know about life insurance and coronavirus
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As the coronavirus numbers continue to grow in the U.S., life insurance companies report that applications have been skyrocketing.
With illnesses and deaths rising from COVID-19 — the disease caused by the virus — some life insurance customers have been wondering whether it's too late to get coverage, or if existing policies cover the outbreak.
Read on to see the answers to six common life insurance questions being raised during the pandemic.
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Yes, life insurance covers COVID-19.
If you already have life insurance to provide financial protection for your loved ones if something happens to you, you don’t need any additional coverage for today's health crisis.
Your existing policy should cover death from any disease — including COVID-19.
“For current life insurance policyholders, if you are diagnosed with coronavirus, your coverage will remain active. Once you buy life insurance, as long as you keep paying the premiums your coverage will stand,” says the website for Quotacy, an online life insurance comparison-shopping tool.
The rate you’re paying for your coverage is locked in for the entire term of your policy, so you don’t need to worry about your premiums going up.
It's not going to change, even with a global pandemic raging.
Be wary of any insurer offering special coronavirus coverage, or attempting to jack up your premium amid the crisis.
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People under 40 typically pay the lowest life insurance rates.
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The coronavirus crisis will not affect your ability to apply for life insurance. However, you’ll need to provide details about your medical history and any recent travel, so if you’ve been exposed to the virus or have visited a high-risk area it may complicate your application.
If you don't have life insurance and would like to buy some, it’s a good idea to do it as soon as possible — before you get sick.
Generally, most people under age 40 and in good health will pay lower life insurance premiums. Anyone 40 or older or who has a preexisting medical condition will pay a higher monthly premium, which is standard practice and not due to the pandemic.
If you’re concerned that a health issue may impact your eligibility for life insurance, free online services are available that will help you find providers who can accommodate your specific needs.
When you apply for a life insurance policy, insurers have traditionally requested that you undergo a medical exam before you can get coverage.
But if you're concerned about having to go to a crowded medical facility or welcome an examiner into your home, don't worry.
Some insurance companies never ask for a physical — so that’s something you may want to look for as you compare life insurance policies online.
Insurers that have an exam requirement are bending it during the current crisis.
Several are providing consumers with immediate coverage and allowing them to put off the medical examination for several months.
And other insurers are looking at available and relevant information to determine whether an applicant is in good shape. They're reviewing electronic health records, prescriptions data and results from recent blood work, to give a few examples.
Never fib on a life insurance application.
You might be tempted to conceal things or even lie when you fill out your life insurance application, so you'll qualify for coverage more easily. But chances are good that your insurer will catch you.
Insurance companies can check medical records and prescription histories, and if they think you’ve been deliberately untruthful they may deny your application or cancel your existing coverage.
Be particularly careful during the early years of your policy, as most life insurance providers have a “two-year contestability period.” That means if you die during the first two years of your policy, your insurer has the right to review your application and cancel the policy if the company discovers you lied.
“As long as you reported honest information on your life insurance application, including sharing health conditions or international travel plans, then you have little reason to be concerned about if a claim related to COVID-19 would be paid,” writes life insurer Haven Life, on its site.
Before you settle on a life insurance policy, you’ll want to shop around and compare rates and features to make sure you’re getting the best deal possible.
Some companies make it easy to review life insurance rates. You just fill out a quick, with multiple insurers that are good fits for your specific needs.
You'll want to look at quotes from several different insurance companies, not grab the first policy you see.
By shopping around a bit, you may be able to get $1 million in coverage — through a process that’s as simple as placing an online order for food delivery from your favorite restaurant.
