As the COVID-19 pandemic continues to sweep across the U.S. and the rest of the world, you might start to wonder exactly how the virus, and pandemics, in general, will have an impact on life insurance policies.
There are two major questions you might be looking to have answered. If you currently have coverage, you may be asking yourself, “How does the Coronavirus pandemic impact an existing policy?”
Or, with the constant attention, the virus is receiving in the media and the scare of becoming infected, you may be asking yourself, “Will the Coronavirus pandemic impact the purchase of a new life insurance plan?”
Regardless of which questions you have, Top Quote Life Insurance has the answers to your Coronavirus and life insurance questions. Whether you have a current life insurance policy or are considering purchasing a new policy, we are here to help.
Before we get into the life insurance details, let’s quickly recap on what we have learned about the current pandemic called Coronavirus (COVID-19).
What is Coronavirus (COVID-19)?
Coronavirus 2019, also referred to as COVID-19 or SARS-CoV-2, is what has been named as the newest strand of Coronaviruses (CoV). It is a brand new virus introduced to the world in late December 2019 and is currently being spread from person to person all around the world.
Coronaviruses (CoV) is a disease that is commonly passed from animal to animal. Although Coronavirus is mostly associated with animal species, the virus has been known to spread from animals to humans, with cases dating back to the 1960s.
Since the 1960s, there have been a few well-known cases of Coronavirus strains that have passed from animals to humans. Severe Acute Respiratory Syndrome, otherwise known as SARS-CoV, that took place from 2002 to 2004. The Middle East respiratory syndrome, also known as MERS-CoV, that first appeared in 2012.
Coronaviruses (CoV) spread quickly and easily from person to person. The virus often results in thousands of people becoming ill and, in some cases, death. As we have seen with past CoV virus strains, and at the current moment, we see this with COVID-19.
How the Coronavirus 2019 Outbreak Started
Coronavirus 2019 is the latest virus to have been passed from animal to human. Coronavirus has infected a large number of humans worldwide. Due to a large number of people that the virus has affected, it has been classified by the World Health Organization (WHO) as the latest worldwide pandemic.
The last pandemic was the H1N1 virus, also known as the “swine flu.” H1N1 resulted in approximately 60.8 million people infected and 12,469 deaths.
Timelines trace the first signs of the COVID-19 to December 31, 2019, when multiple people from Wuhan China fell ill to flu-like symptoms. Within a few weeks, the virus began to spread throughout China and Europe while quickly making its way to the United States.
The source of the virus has been identified by the U.S. Centers for Disease Control and Prevention (CDC) to have come from the wet markets of Wuhan China.
The wet markets, also known as street markets, are a place where citizens can purchase items such as raw meats, seafood, produce, and in many cases, live animals, including illegal wildlife.
Keep in mind these markets can be unsanitary and are often poorly regulated. It is the perfect breeding ground for a zoonotic disease to be transferred to humans.
The exact animal responsible for infecting nearly 200,000 people worldwide and responsible for over 7,000 deaths is not 100% known at this time. However, signs are pointing to the virus stemming from either a diseased bat or pangolin.
Related Article: Coronavirus outbreak timeline from start to present
What are the Symptoms of Coronavirus?
Health experts, as well as individuals who have personally been diagnosed with Coronavirus, have stated that symptoms of Coronavirus were similar to the common cold. The World Health Organization (WHO) also backs this statement up, stating that the common Coronavirus symptoms may include:
- Sore throat
- Runny nose
- Nasal Congestion
- Aches and Pains
- Shortness of breath
However, in some cases (1 out of every 6 people) can experience more severe symptoms that can lead to pneumonia or breathing difficulties.
Expert Information: WHO on Symptoms of Coronavirus COVID-19
How is Coronavirus Spread?
As with most common colds and yearly flu viruses, the Coronavirus is spread person to person.
Sneezing and coughing release respiratory droplets within the air and on surfaces, which appear to be the mass majority of how the Coronavirus is spread.
Expert Information: CDC on how to prevent the spreading of Coronavirus
Who is at Risk of Catching Coronavirus?
At the moment, there is no vaccine for COVID-19. It is important to minimize the risk of spreading the virus by following the guidelines of the CDC to protect yourself, your family, and the public.
Remember these quick tips:
- Follow quarantine recommendations to avoid exposure to the virus
- Wash your hands with soap frequently for at least 20 seconds
- Avoid touching your face with unwashed hands
- Avoid contact with sick people
- Following social distancing guidelines
Reports are showing that contracting the illness will result in generally mild symptoms, especially for children and young adults.
Symptoms can become more severe for older adults and seniors, especially those who have pre-existing health conditions.
Expert Information: Who is at the highest risk of COVID-19
Answers to Your Life Insurance & Coronavirus Questions
Coronavirus has caused a global health crisis that is like no other one seen before. You cannot turn on the television or radio without hearing about the pandemic and how quickly it continues to spread across the world-dominating the headlines day after day.
The COVID-19 pandemic brings up an abundance of questions pertaining to the disease as well as what people should be doing while in this crisis.
Although Top Quote Life Insurance is not certified to give professional health advice on Coronavirus, we are experts in life insurance.
Therefore, we can provide you with the answers on what you need to know about Coronavirus (COVID-19) and the effects it currently has on life insurance.
Does Your Life Insurance Policy Cover Coronavirus?
80% of COVID-19 cases are stated to be mild, but you do need to take into consideration your age and current health status. The chances of dying from Coronavirus are very low.
However, it still raises the question for both current policyholders, as well as people who are thinking about purchasing a life insurance policy, as to whether or not life insurance will payout due to the death of Coronavirus?
If you currently own a life insurance policy and it has been two years or longer, there is no reason to be concerned. As long as you are remaining current on your premium payments, your life insurance provider will honor a COVID-19 related death or any death in that matter.
If your life insurance policy is less than two years old, then you currently fall within the two-year contestability period.
Two-Year Contestability Clause
When you purchase a new life insurance policy, there is an important factor to always keep in mind, and that is the two-year contestability period.
The two-year contestability period is a standard contract clause that allows the life insurance company to investigate a death benefit claim within the first two policy years.
The clause is there to protect the insurance company from having to pay out a death claim due to fraud or false information provided during the application process.
If you have purchased a life insurance policy within the last two-years, you should not fear that the life insurance company would not pay out a claim if you were to suddenly pass away within the first two policy years.
The two-year contestability clause is not a way for the life insurance company to get out of paying out a claim. The insurance company has to provide proof that the insured either lied or committed fraud during the underwriting process for the claim to not be paid.
If you were to pass away within the two year contestability period, your beneficiary might have to wait for a short period while the insurance company finishes investigating the claim.
However, as long as you provided honest answers to all the application and medical questions during the underwriting process, the insurance company will pay a claim on COVID-19 or any other accident or health-related death even if it’s within the first two-years.
Does My Life Insurance Policy Offer Features to Help With a Coronavirus Diagnosis?
Some life insurance policies offer features called living benefits. The most common living benefit rider that can be found on most life insurance policies is called an accelerated death benefit for terminal illness.
While COVID-19 can be a little scary, the likelihood of it resulting in terminal illness is very low.
In the event, you were diagnosed with a terminal illness due to COVID-19, you may have the option to accelerate a portion of your death benefit. The total amount is generally 75% of the total death benefit, but it’s best to verify the exact details with the provider you have your current coverage with.
Just keep in mind that accelerating your death benefit will reduce the total amount of death benefit that would be going to your beneficiary.
There may also be the chance that your life insurance policy also offers the ability to accelerate your death benefit for chronic, critical illness, or even disability. Again, while all of these options are an excellent source of protection, the likelihood of needing to use them is low with a Coronavirus diagnosis.
Should You Be Reviewing Your Life Insurance Policy?
Yes! At Top Quote Life Insurance, we always recommend that our clients review their life insurance coverage at least once per year.
With a global pandemic in full swing, there is no better time to pull your life insurance policy out right now and look over all the details.
Can’t find your policy? Call your insurance agent or even the life insurance company directly. They should be able to pull your coverage up and review the information with you.
Things you need to look out for may include:
- Is your current address correct?
- Is your name correct?
- Is your beneficiary information correct?
- Is your coverage getting ready to expire?
- Is your premium still the same, or has it gone up?
- Do you need to increase your coverage?
Life gets busy, we understand, but if it’s been over a year since your last life insurance policy review, please take a few minutes to review your coverage to make sure all the information is up to date.
Can You Purchase New Life Insurance During a Worldwide Pandemic?
Absolutely. Top Quote Life Insurance is an independent life insurance broker that works with over two dozen of the top-rated life insurance companies.
We are constantly staying up to date with the latest information passed along from the brands we work with regarding how they are handling the COVID-19 virus.
At this time, all the life insurance companies that we work with are accepting new applications for life insurance coverage.
We are not aware of any life insurance companies in the U.S. canceling the sale of new life insurance coverage.
Is Now a Good Time to Purchase Life Insurance?
The Coronavirus outbreak should not deter you from seeking life insurance. Whether the pandemic has moved you to purchase life insurance or some other reason has brought you to this point, you should be checking out your options.
Do you know what the best part is?
You don’t even need to leave your house to get coverage. Top Quote Life Insurance provides one of the easiest opportunities to compare rates and even apply for coverage without having to meet face to face with an agent.
Our application process utilizes electronic forms and an e-signature process. It is even ideal for seniors who are looking to apply for a policy without needing to leave their home, risking unnecessary exposure to the virus.
We also have licensed agents standing by to help assist in answering questions or walking you through the application process.
Key Factors to Applying for Coverage with Coronavirus In Full Force
Regardless of what status the world is in, it’s important to answer all application questions truthfully, especially questions pertaining to medical history and past or future travel outside of the U.S.
Insurance providers utilize advanced underwriting tools to help verify honesty to application and medical questions. The use of these tools will ultimately determine if an applicant is eligible to receive life insurance coverage.
However, nothing is foolproof, and even underwriting tools may not always be able to provide all the answers to help an underwriter make a decision on coverage.
As an applicant, the most important thing you can do right now is to be entirely honest during the application process. Insurance providers are paying extra attention to medical conditions and travel history.
Why Travel Has An Impact On Underwriting
Life insurance providers generally use travel notices from the Centers for Disease Control and Prevention (CDC) to guide their decision process.
The CDC lists countries based on their health-related travel safety. Warning Level 3 indicates that individuals should avoid all nonessential travel to that country.
CDC lists China (this does not include Hong Kong, Taiwan, or Macau), Iran, Italy, and South Korea, Europe, the United Kingdom, and Ireland as Warning Level 3 countries.
If you have recently traveled to any of these countries or have plans to travel to them soon, do not be surprised if your application for life insurance is deferred to a later date.
Do not lie about any of your travel history or plans. In the event of a death and if it is proven that you provided false information, life insurance providers can contest the claim, either lowering the death benefit or denying the claim altogether.
It is never okay to lie on a life insurance application, but now more than ever, you should be very specific about any medical conditions and any related travel.
Consider a No Medical Exam Life Insurance Policy
Traditionally, applying for life insurance coverage would require you to meet with an examiner to take an exam as part of the application process.
Data received from the exam and lab results provide the underwriter with the information needed to make a final approval for coverage.
Although this remains a widely used method when applying for life insurance, many companies offer the option to apply for coverage without an exam.
As we previously mentioned, underwriting tools and technology have significantly advanced over the last decade. In many cases, life insurance can be approved using the information received from these tools to provide approval for coverage and eliminating the exam completely.
How is it possible?
Underwriters have access to view data and information pertaining to reports such as your MIB, Motor Vehicle Report, Prescription History, and even your medical records if needed.
Access to this information can, in many times, provide the answers needed to determine whether or not an applicant will be eligible for coverage.
Not every applicant will qualify for no medical exam coverage, and the need for a medical exam may be required to obtain coverage.
However, if you’re considering coverage take a look at getting a no medical exam life insurance policy first and foremost.
Are examiners even seeing people?
At the moment, they are, but the situation is being monitored closely and could change soon, depending on how bad the outbreak gets.
Exams are done by a third party exam service contracted with the insurance company. Some exam companies, such as ExamOne, who are widely used for life insurance exams, have taken extra precautions by pre-screening applicants before the appointment.
These measures have been taken to provide the safety and well-being of the examiners who are required to meet with applicants to conduct their exams.
Pre-screening may involve questions as to whether or not you are experiencing signs of fever or respiratory distress or if you have recently been around anyone with these symptoms.
If you have recently traveled or are about to travel within the next 14 days, your exam will be rescheduled for 14 days later.
Will Coronavirus Have An Impact on Life Insurance Rates?
There are hundreds of life insurance companies trying to earn your business, and one of the most significant ways they do this is by offering affordable rates.
It’s not uncommon for life insurance companies to switch up their life insurance rates to stay competitive is a large pool of life insurance companies.
In fact, AIG announced lower rates on their Select-A-Term life insurance coverage effective February 1, 2020. On January 13, 2020, Protective Life announced lower rates on its popular Classic Choice Term life insurance coverage.
Out of over two-dozen life insurance companies that we work with, we are not aware of any increased rates coming due to the COVID-19 outbreak. We don’t foresee it happening either.
Can you get Life Insurance with Coronavirus Diagnosis?
If you have been diagnosed with the Coronavirus (COVID-19), we wish you a healthy and speedy recovery. If you are inquiring about life insurance with a positive diagnosis, you will have to wait until you are fully recovered.
Unfortunately, at the moment, we are unaware of how long the wait (for new coverage) will be for someone who has been previously diagnosed with Coronavirus (COVID-19) and has fully recovered.
Because the virus is so new, we do not believe there has been a situation such as this to arise. As soon as we have updated information on this subject, we will be sure to update our article to keep our online visitors up to date on the latest information involving life insurance and the Coronavirus.
We Can Help
Top Quote Life Insurance is closely monitoring the latest news and updates of Coronavirus (COVID-19). While we all experience the major pandemic, know that Top Quote Life Insurance is here to answer your life insurance needs.
Please do not hesitate to reach out to us for assistance.
Be safe, stay healthy, and remain calm.
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