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life insurance cover coronavirus

Does Life Insurance Cover Coronavirus?

Last updated: January 27,2021
Originally Published: August 07,2020
by Rosen Valchev

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What to Consider before buying Life Insurance

The Coronavirus stroke fears into our hearts and caused massive panic. It made us all afraid for our lives. And many individuals who previously disregarded life insurance are now starting to have second thoughts amid the COVID-19 pandemic. But does life insurance cover Coronavirus?

After all, life insurance is not actually for you. It is to secure the financial future of your closest ones. What is your family going to do if you pass away suddenly? 

Can they afford to pay off your debts? Can they keep their current lifestyle? Or they will struggle to make ends meet without you. Can they even afford burial expenses right now, when cash isn’t in excess? Just think about that for a moment.

Your life isn’t worthless. And let’s face it. Everything can happen. Especially with COVID-19 out there. If you still haven’t checked your options I encourage you to see some life insurance quotes right now and make a decision as fast as possible.

If you keep postponing, it can get too late. But what is the exact situation with life insurance and COVID-19?  Can you get life insurance right now or if you already have one, does it cover death from Coronavirus? Are there age limits as well?

Before we address the above let’s talk about some basic you should absolutely know before you even think of purchasing life insurance.

What to Consider before buying Life Insurance during Coronavirus?

Most people get caught thinking about the different causes of death and forget the most important things when it comes to life insurance. First and foremost, you should make sure you are getting enough life insurance coverage.

For example, if you want to pay off your mortgage and replace 5 years of your annual income, a $100,000 coverage life insurance won’t do the job. More likely you will need something like $500,000.

You should also consider whether you want and need a term life insurance or permanent life insurance. That depends on many factors. There are different types of term and permanent life insurance. So you have plenty of choices. But that is a separate topic. 

Ultimately, make sure you know what are the benefits and the downsides of different life insurance policies. If you are not sure about something always ask. Don’t assume and guess as you (or more probably your spouses) might be unpleasantly surprised when the cheque comes.

Apart from that, there are two more crucial things you must be aware of before buying life insurance.

1.Life Insurance Waiting Period

You might have heard of the term “waiting period” before. But what is it, actually?

Simply put, the waiting period is the time you have to wait before your life insurance (or another type of insurance policy) gets into effect. That is crucial because if you die during the waiting period your beneficiaries may be denied a death benefit.

Some types of life insurance like final expense insurance or guaranteed issue insurance have longer waiting periods, typically between 6 months and 2 years. If you die during the waiting period the beneficiary won’t get the death benefit but just the premium payments paid so far, as a form of a refund.

So ensure you know the policy waiting period before you enroll. Typically there isn’t much to worry about. Your insurance coverage usually begins once your application is approved, you signed all additional documentation, the policy has been issued and you made the first premium payment.

However, right now there is a huge volume of new applications. For that reason, it may take longer for the insurance company to approve your application once you’ve submitted it. 

Nevertheless, the majority of insurers provide clients with conditional and temporary coverage. Temporary coverage can be given usually when the applicant completes a medical exam and makes the first payment when submitting the application. 

Ask the insurance company if they can provide you with such coverage. In the current situation, it is extremely relevant. Also, don’t skip the fine print and always read carefully what coverage are you getting before signing the papers.

While we are on the topic, you may ask whether anything has changed with life insurance medical exams. A common question people ask insurers is “Are you still performing life insurance medical exams?”.

Unfortunately, the answer is – it depends.

On one hand, insurance companies can’t afford to drop all their requirements just to simplify the application process. This could result in terrific industry losses.

On the other hand, many people and companies are honoring social distancing. This means in-person blood tests and other types of medical examinations are not as easy to perform. So insurers are forced to make some temporary exclusions to their rules.

A study by LIMRA found that 26% of insurance companies are expanding automated underwriting programs and some have even dropped paramedical requirements entirely. So this may be a good chance to get life insurance easier.

2. Life Insurance Exclusions

It is true that you can get a life insurance policy much easier right now with some insurance companies. Despite that, you should be mindful. Above all, don’t lie or “accidentally” omit some health-related information when you are filling in the questionnaire.

If you do this you can get a policy exclusion and your death benefit could be easily denied by the insurance company. Even if you die in an accident that is not related to your health condition.

For example, if you didn’t report your back problems and spine surgery and you die in a plane crash the company can refuse to pay out the death benefit. Just because they can prove you lied or left our information in your application.

So once again, please DON’T lie or omit any information in the questionnaire. There is no point in signing up for life insurance if you intend to do this. Also, if the company proves the insured person committed suicide, the benefit won’t be paid as well. That obviously is another common exclusion.

These are the main ones but there are other exclusions as well. Ask the insurance company to inform you about them before you enroll.

Can I still buy life insurance during the COVID-19 pandemic?

The short answer is yes. Although the situation is constantly evolving. As new information becomes available, insurance companies are making new decisions in order to adapt.

For now, you can still buy life insurance, despite the COVID-19 pandemic. Moreover, if you already have an existing policy there is a high likelihood you are already covered.

Nevertheless, double-check with your insurer just to be on the safe side. 

As we mentioned the application can take longer than usual due to the current impediments with medical exams. Sadly that postpones the insurance company’s final decision and offer as well. But many do offer temporary insurance so you can take advantage of that.

Does life insurance cover death from a global health crisis like Covid-19?

The answer is the same – yes it does. Many people are worried that insurance companies would deny their death benefit getting away with the current Coronavirus outbreak as an excuse. 

This is completely normal bearing in mind what airlines did, for example. The majority of airlines twisted the situation in order to deny issuing refunds for flight cancelations. Luckily, that isn’t the case with life insurance.

You can absolutely get your death benefit if you pass away from COVID-19. Again you had to be transparent about your health conditions in the application. However, there is one more thing that insurance companies are currently interested in. 

They want to know about your travel plans. 

Can I get coverage if I recently traveled to or plan to travel internationally?

Questions about your travel plans in the life insurance application aren’t a new thing. However, they are more relevant now than ever and life insurance companies put more emphasis there.

With the Coronavirus spreading like wildfire insurance companies don’t want to take unnecessary risks. If you are traveling to a highly contingent area or country you could be hit with a higher premium price and more restrictions.

pandemic coronavirus life insurance life insurance cover coronavirus
Photo by Stephanie Martin on Unsplash

Most life insurance application approvals will be postponed if you are traveling to high-risk areas (which is almost everywhere right now). Once you return to the U.S. you will have a 30 day waiting period before your application resumes or you are able to reapply. 

Also, you must be aware that some insurance policies don’t have international coverage. That means if you die while abroad the insurance company can refuse to pay the death benefit. For that reason, travel insurance is a way better tool to protect yourself while traveling.

Can I still get instant, no medical exam life insurance coverage?

As we already mentioned some insurance companies amended their application and approval requirements. A large number of companies changed their automated underwriting programs and some even dropped medical requirements in general.

So the answer is yes, you can get an instant, no medical exam insurance. Yet, only if you qualify which is determined by your application. Once again be completely open and honest.

Your policy can be suspended or canceled by the insurance company if they find out you lied or didn’t tell everything. Both for your health and for your travel plans. And there is no point in getting insured in the first place if the death benefit won’t be paid out anyways.

How does two-year contestability work if I contract COVID-19 in the near future?

The two-year contestability is the defense mechanism that insurance companies use to insure themselves against false information on applications. Basically, if there is a claim within the first 2 years of your policy issuance, the insurance company will pay extra attention.

They will thoroughly investigate if the policyholder hid any information or lied in an effort to fraud the insurance company. If the policyholder is found at fault the company will decline to honor the claim.

On the contrary, if everything looks fine they will go ahead and pay the death benefit. In other words, if the information in the original application is honest and complete the insurance company will pay the death benefit even if the claim is made in the first two years.

That includes death from COVID-19 as well. As long as you are truthful, the insurance company will pay the money if you die from Coronavirus during the two-year contestability period. So you shouldn’t be worried about that.

Get your Life Insurance Today

Unfortunately, when most people need life insurance it’s too late. Don’t be part of that statistic. You can get your life insurance today. Don’t worry, it is not complicated.

The application usually takes between 10-15 minutes maximum. Moreover, especially for term insurance, it is extremely cheap. So you have little room for excuses. Also, if you are a travel lover like us here at PointsPanda, make sure you check some travel insurance options. That is the best way to stay protected during travel in these unprecedented times.

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