Life Insurance and the Coronavirus: Your Questions, Answered

Your guide to the coronavirus and life insurance, including if your policy covers COVID-19 deaths and what to do if you can’t pay your premium.

KAYDA NORMAN

April 7, 2020Insurance, Life Insurance

Does life insurance cover deaths from COVID-19?

Life insurance policies will pay out in the event of a death from COVID-19. Although a life insurance company may change guidelines for future applicants, insurers aren’t able to alter any policies that have already been sold. This means if you already have life insurance, your company won’t be able to suddenly change the policy and deny your beneficiary a payout if you die from the coronavirus. However, an insurer may reject any life insurance claim if the policyholder submitted an inaccurate life insurance application or didn’t pay insurance premiums.

Can you get life insurance if you have the coronavirus?

Right now, insurers are asking people to wait until they have recovered from the coronavirus to apply for life insurance. When applying for a policy, you’ll be asked to disclose your medical history, including whether you are currently ill. Some companies are specifically asking applicants if they have been treated for COVID-19. Because the coronavirus can make someone terminally ill so quickly, you likely won’t even be able to purchase a guaranteed issue policy, a type of life insurance that doesn’t require a medical exam or extensive health questions and offers a relatively small death benefit.

How has COVID-19 affected the life insurance application process if you are healthy and don’t have the coronavirus?

Applying for life insurance has changed in a few key ways in the wake of the coronavirus pandemic, including:

• Medical exams and records are required for most types of life insurance applications. Americans are being instructed to follow social distancing guidelines that include avoiding unnecessary travel and human interaction. As part of this mandate, many nonessential medical offices are closed, making it difficult to get patient records. Some insurers are offering a virtual application process that allows approved applicants to receive life insurance without a medical exam.
• Past travel history and future travel plans to high-risk areas for the coronavirus may affect whether you can apply for a policy immediately before and after travel.

Life insurance rates have remained the same as before the pandemic, but this could change in the future.

Will travel history affect your rates or application process?

Applicants are usually asked to disclose any international travel plans when applying for life insurance. While this information is still usually required, now there also are waiting periods for anyone who has traveled anywhere overseas. However, this guidance could change and insurers may place additional restrictions.

Will medical exams be delayed?

Some companies are extending medical exam time frames. Certain companies are still offering in-person exams, but availability may be limited and depend on your location. In addition, insurers may ask you to postpone the exam if you’re sick or have recently traveled internationally. Some insurance companies are offering coverage — both term and permanent insurance — without a medical exam through a virtual application for healthy applicants. Customers can receive life insurance (generally from $1 million to $3 million) by answering questions online or through a phone interview.

What if you can’t pay your life insurance premiums because you lost your job due to COVID-19? Will you lose coverage?

Contact your insurer if you don’t think you will be able to pay your premium. There is usually a grace period to pay an insurance bill, around 30 days. If the bill is paid during this time, your policy will remain in force. Some companies are extending grace periods, and state regulators are requiring it in certain states. Outside of a coronavirus-related financial hardship, if a premium isn’t paid after the grace period, the policy is typically voided. Most insurers let customers apply for reinstatement three to five years after insurance is lost, as long as they prove they aren’t too risky to insure. To determine how healthy they are, policyholders might have to answer medical questions or take another life insurance medical exam. Other options to help with costs include changing how often you pay your bill (monthly, quarterly) or reducing your coverage.