The Coronavirus pandemic has made many people, especially parents, start thinking about life insurance. But does life insurance cover COVID-19? Are insurers even offering new life insurance policies during a global health crisis?
Forty-three percent of U.S. adults are “concerned they will personally contract coronavirus”, according to a recent survey from Prudential. Another 25% from the survey say they’re either planning on buying or ramping up their life insurance policies.
In hard-hit New York, which has recorded over 10,000 coronavirus-related deaths so far in 2020, regulators have mandated a 90-day waver on life insurance payments to state citizens experiencing financial hardship due to COVID-19. California is pursuing similar mandates on life insurance companies.
Clearly, Americans are concerned about both the short- and long-term impact of COVID-19 on their households, and that’s exactly why financial consumers are so concerned about life insurance and their finances in the time of COVID-19.
Where do I begin looking for life insurance?
One option is an app called Fabric. Fabric helps users find affordable term life insurance tailored to meet your specific needs. Apply online by answering some brief questions — a process that only takes about 10 minutes. If any questions arise, a team of licensed professionals are on standby to answer them.
You’ll be matched with personalized policies issued by Vantis Life, a Penn Mutual company. You can find 10, 15 and 20-year terms and coverage ranging from $100,000 to $5,000,000. Pricing for life insurance will vary, but policies are available for as low as $15 per month.
Fabric has a rating of 4.9/5 in the App store, and we explain more how it works here.
I already have life insurance, but does it cover COVID-19?
Your active life insurance policy most likely does cover coronavirus-related deaths.
That means in the event of a policy-holder’s passing, the life insurance policy will pay out to plan beneficiaries via the policy’s death benefit.
Once a policyholder is diagnosed as having the coronavirus, insurance companies can’t make any changes to a policy or deny benefits if that policyholder passes away, and COVID-19 is listed as a contributing factor to death.
I don’t have life insurance – can I buy it now during the COVID-19 crisis?
While most insurance companies offer life insurance policies during the pandemic, you may find that the policies will cost more and the policies may take longer to kick in.
Factors that could delay the approval of a life insurance policy include the applicant’s travel history, for example, recent travel to a hard-hit coronavirus country like China or Italy.
Furthermore, many life insurance applications are dependent on an on-site or in-home physical examination. Usually, life insurance medical examinations occur in the applicant’s home and are administered by insurance company medical screeners – not doctors or nurses.
Right now, some insurers are waiving the examination for 90-days or so, and are issuing policies right away, with provisions included for future medical examinations when the coast is clear.
With major lockdowns in effect across the U.S., getting that physical completed could take longer, thus further complicating the purchase of a new life insurance policy during the pandemic.
What happens if I stretch the truth on my insurance application?
A word of warning. Insurance applicants who lie about traveling overseas or over any potential pre-existing conditions are taking a big risk.
Now, more than ever, life insurance companies are getting aggressive in vetting new consumer policy applicants. Checking prescription medication or doctor/clinic visits is easy work for a life insurance company, so hiding information should never be an option for life insurance applicants.
Does age matter on a life insurance policy?
In general, age does matter with life insurance companies, and age-related factors can influence policy costs.
Any American under the age of 40 and in solid financial health should qualify for a life insurance policy with low monthly premiums. U.S. adults 40-years-old or higher, especially those with pre-existing health conditions, such diabetes or heart disease, will likely pay more for a life insurance policy.
A 40-year-old non-smoker can expect to pay $38.14 per month for a 20-year term life insurance policy with a payout of $500,000, according to recent data from ValuePenguin, A 60-year-old non-smoker can expect to pay $245.81 per-month for the same policy.
Can a life insurance company raise my policy rate costs, or make other changes due to the pandemic?
Once you’ve purchased a policy and have started making payments on it, the terms and conditions of that policy – including costs and coverage benefits – remain fixed and by law cannot be changed.
If your life insurance company tries to change those terms and conditions of your life insurance policy at any time – pandemic or not – contact your state’s insurance commissioner and report the issue. No life insurer has the right to boost rates or change terms once a policy is in place.
Find your state’s insurance commission with this link from the National Association of Insurance Commissioners.
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