With the recent outbreak of Coronavirus many people are experiencing varying levels of fear and anxiety caused by uncertainty. COVID-19 is a novel (read: new) virus. People don’t yet have immunity to it. And, there’s still a lot we’re learning about coronavirus. So, it’s only natural to have questions and concerns. The Jenny Life team has put together this page as a resource to help you feel calm and self-assured.
Absolutely! Coronavirus is a pathogen like the flu and is covered by life insurance. Life insurance is designed to provide financial protection to your beneficiaries after death. This can include a spouse/partner, children/dependents, parents, family, or even a cause/charity you believe in. Know that if you previously purchased a life insurance policy, you will be covered should COVID-19 pandemic result in your passing.
Yes, you can apply. The coronavirus pandemic has the potential to make getting life insurance more complicated. Insurance companies are risk-adverse. These insurance carriers may want to know if you’ve had any recent travel or any future travel plans that might increase your chances of exposure or contracting COVID-19. You will be also be asked about your present health condition.
Your medical history and current health are important factors that insurance companies take into consideration when making a decision whether to create a life insurance policy. Because the policy can be invalidated during a two-year contestability period if you give false information, it is very important that you’re truthful in all your answers.
One form the insurance companies are using is what is called a “Good Health Statement.” When the life insurance policy gets delivered, part of the delivery receipt is a good health statement. It’s basically a way for the insurance company to ask one more time if there is anything that has come up since you applied for life insurance that is worthy of them taking a look at before finalizing the transaction. In short, if you get Coronavirus during the application process, you would need to disclose that.
Jenny Life has spoken with several of our life insurance company partners. Their approach has been to look at how likely the disease is to spread, what treatments are available (or in the pipeline) and they use historical data to estimate additional mortality they can expect to emerge as a result of an outbreak. They have set aside additional capital to protect their ability to honor their obligations to policyholders when outbreaks such as Coronavirus occurs. In addition, in some cases insurance companies are further supported by reinsurance partners (basically insurance companies that backup insurance companies).
Today (as of March/April 2020) most carriers are not allowing applications indicating future travel AND past travel outside the United States until you’ve been back in the United States for a minimum of 30 days. [Note for future travel--if a state, such as GA, CA, etc, has restrictions, those cases are reviewed on a case by case basis by the carrier before policy issuance.]
You should expect that it will be more difficult to purchase life insurance if you have international travel plans and/or have returned to the United States in the last 30 days.
Right now the “good health statement” is a new requirement for nearly everyone (very few exclusions). This is regardless of travel or not. In short, expect to sign a good health statement as a prerequisite of receiving the policy.
Many carriers are making changes to their underwriting practices. Some are implementing new temporary underwriting guidelines in response to COVID-19. In addition to the changes involving foreign travel (mentioned above), insurance carriers are in some cases are:
— Postponing applications for COVID-19 disease cases. Your application will be delayed for at least 30 days after full recovery. Reconsideration parameters will depend on the severity of the disease and current health status.
— Postponement parameters for applicants over age 50 whose risk class exceeds certain rated table parameters (their risk profile includes referenced underlying chronic conditions). Conditions include cancer, cardiovascular disease, diabetes, immunosuppression, kidney disease and lung disease.
On a positive note, many insurance companies are issuing a grace period extension. When your insurance policy is active, it is called a “Policy in Force.” When a policy holder doesn’t pay their bill on time typically the policy will be cancelled after the standard grace period (either 30 or 31 days). Specifically, during these extraordinary times, some carriers are extending their normal grace periods by as much as 90 days. If you have not paid your insurance premium or you are experiencing financial difficultly it is highly advised that you speak with your insurance company. Many have special programs to help.