Shopping for life insurance is not the same as it used to be. In the wake of COVID-19, there are new roadblocks that must be faced. The global pandemic has made the most basic elements of a life insurance transaction quite challenging.
Whether it’s appearing for a paramedical exam or a face-to-face meeting to discuss quotes, COVID-19 offers serious challenges for both customers and carriers. However, purchasing life insurance is crucial, now more than ever. With the rising death toll and distressful isolation associated with COVID-19, more and more people want to feel financially and psychologically secure.
If you’re the only earner, you want to make sure that your family continues to receive the same benefits even when you’re not there for them. You would also want to wrap up any and all debts that you may have, lest they become a burden on your family.
Nobody knows what tomorrow holds and this is precisely why a thorough life insurance policy is indispensable. But COVID-19 has posed several barriers that can be hard to detour. Whether it’s social distancing, indefinite lockdowns, curfews, or self-quarantine, getting your life insurance renewed is extremely difficult. Here we discuss how to safely buy life insurance in the time of COVID-19.
The Burning Question – How Has COVID-19 Impacted Life Insurance?
The last thing anyone would want is to die from COVID-19 and be excluded from a life insurance policy simply because the pandemic wasn’t covered in the terms. Amidst the growing uncertainty and financial insecurity due to COVID-19, the question is, “how will the pandemic affect your life insurance application process?”
It’s important to note that life insurance companies are, in fact, taking applications. The pandemic has virtually impacted everyone’s life insurance policy in some way or the other, be it in the form of premiums or application processing. These are the new changes you can expect when buying life insurance:
Application Questions Concerning COVID-19
Insurers are slowly realizing the growing concern and have added COVID-19 into their terms. But this time, there are new questions added to the application forms. If you’re applying for life insurance, your insurer will first want to establish whether you’ve:
- Had any coronavirus symptoms like high temperature or continuous cough
- Been tested positive for coronavirus
- Were advised to self-isolate
- Had contact with someone who was tested positive or in the least, suspected for having coronavirus
Purchasing life insurance is a huge deal for both the policyholder and the carrier. They will promise you a huge amount of coverage, which should only be finalized when all the terms are crystal-clear. This is why it’s incredibly important to be honest and truthful from the start.
Don’t try to hide your symptoms or health conditions. If you have been experiencing the symptoms, tell them about it. The last thing you’d want is for your life insurance to become void because you weren’t truthful about your condition.
Please be mindful that your insurer will need to clear your case before the application can be finalized. This serves as a statement of health, indicating that you don’t have COVID-19. If, in case, you’ve had a recent history with any of the above-mentioned cases, your application might be postponed for some time.
Life Insurance Exam
Social distancing and self-quarantine have made it extremely difficult to have a chat with your next-door neighbor, let alone allow a paramedic to test you.
Standard paramedical exams typically require a professional to come to your house and carry out a variety of tests and measurements like blood pressure, urine tests, and so on. However, life insurance companies may be looking into safer alternatives.
Many insurance companies are still sending paramedics, but they’re taking extra precautionary measures and ensuring diligent hand-washing to ensure the safety of both the customer and the staff. However, many other insurance companies are handling the pandemic in a different way.
Instead of taking an exam, they are heavily relying on attending physician statement (APS) and digital health data. This could typically include all your prescriptions, personal information, medical history, and past doctor’s records. They will also gather routine information about your health to consolidate your life insurance application.
But an alternative to the exam might be difficult if you’ve requested for high coverage. In this case, don’t be reluctant about taking the paramedic exam. Due to the outbreak of COVID-19, many insurance companies may extend the time frame for finishing the exam.
So, even though COVID-19 has impacted life insurance policies significantly, many companies are responding positively to applications. But how the procedure is carried will depend on your insurer. For this reason, always have a detailed discussion before finalizing the coverage.
If your coverage is anywhere from $100,000-$500,000, you might be able to apply for insurance without a physical exam. If you’re a young and healthy individual and your only concern is the COVID-19 outbreak, you might only have to complete a phone interview to inform the company about your medical history.
In this case, many life insurers do make use of “accelerated underwriting” for applications they’re sure about. The process cuts the approval time from an entire week to anywhere between 24 and 48 hours. You can also have a word with your insurer and discuss options for fast life insurance.
Healthy individuals are more likely to qualify for instant coverage. If you don’t have a chronic medical condition, you can use this to your advantage to speed up the application process. However, keep in mind that accelerated underwriting can be just as costly as undertaking a standard physical exam.
COVID-19 has limited physical contact, which is why many insurers are also offering online applications. In fact, you can start the process online and continue to discuss the coverage, budget, and terms of the policy with your insurer.
When submitting an online application, always make sure to keep your insurer in the loop. They will be able to guide you on the best insurance plans that fit your budget and are important.
However, if you’re purchasing life insurance during the pandemic, you can expect a few limitations in acceptance and availability. Applicants typically get 120 days to complete their application. If, in case, you can’t take the medical exam, a lot of life insurers do offer temporary coverage instead. But this will last until you do take an exam.
Reporting Recent Travel History
When buying life insurance, you will have to disclose your recent traveling history. This is especially critical due to several bans on international flights. Even when your case may be clear medically, your application could be delayed if you’ve traveled internationally.
This is because it can take anywhere from 7 days to 2 weeks for the symptoms of the virus to show. Your insurance company will need to be sure that you’ve been tested negative before your application is confirmed.
International travel is almost always a noticeable concern for life insurers. You can expect your application to be postponed for at least a month after you return. However, in order to fully qualify for life insurance, you need to be honest throughout.
Don’t hesitate to tell your insurer about all your travel history in recent months and years. This way, you can establish a trustworthy relationship with them, which will certainly prove to be fruitful in the long run.
Discuss your future plans, coverage expectations, and budget with your insurer. In uncertain times like these, getting comprehensive coverage might be the best option. As compared to term insurance, a comprehensive plan offers death benefits as well as protection through a critical illness.
People with children are often interested in buying permanent life insurance. While this is a safe option, it might be out of your budget. It can be several times as expensive as a term plan. But even when you have to pay a hefty premium, unlike a term plan, permanent insurance won’t expire before you do.
A term plan only pays out to the beneficiaries for a specified time period. However, comprehensive cover can also protect you from costly medical treatments in case you are tested positive. Another great advantage is that two claims can be made when you’re comprehensively covered.
This includes the time when the critical illness is diagnosed, followed by regular installments to compensate for the loss of income. The second claim is, of course, when the policyholder dies. However, while these are standard terms, each insurance company will have varying policies when it comes to comprehensive cover.
It’s best to discuss your options with your insurer to ensure that you settle for the best life insurance plan. But a good tip is to always focus on a comprehensive cover as it will protect you through an acute pandemic like COVID-19.
Reliable and Financially Strong Insurance Company
In the end, it all boils down to the credibility and expertise of the insurance company you’re working with. COVID-19 is a terrible pandemic and the best way to cope with the rising uncertainty is to join hands with a well-informed and financially strong insurance company.
Buying life insurance is no joke. It’s a policy that’s going to last for many, many years, which is why it’s crucial to purchase it only from a secure company. A reliable and trust-worthy insurance company will proudly hold up their records, customer testimonials, and have strong reserves.
The biggest proof of their financial strength and safety is how they’re dealing with their existing customers. Look for an insurer whose customers have had policies for at least 70-80 years – that’s when you know a carrier is dependable.
Additionally, also search for the number of policyholders the company has. The greater the number, the more reliable they will be.
Your Life Insurance Agent Is Also Your Financial Adviser
Your life insurance agent can offer so much more than just preparing your application. They are also your financial planners and true advisors. It comes under their expertise to help you weigh your assets, liabilities, and risks before settling for an insurance plan.
Getting insured is not a one-off process. It requires extensive discussions, advice, and guidance provided by your agent. On every step of the way, make sure to consult your agent about your financial plans and medical history.
However, due to COVID-19, most of your meetings might not be face-to-face. This is why technology is an amazing tool in these trying circumstances. Insurers who care about their customers will offer phone interviews, video conferences, electronic documents, and other digital ways to guide their customers and offer them assurance.
A Few Exceptions to Consider
The threat of COVID-19 can plunge you into desperation. You might want to buy life insurance as soon as you can. However, there are still a few exceptions that may void a claim due to a death resulting from COVID-19. Here’s what you should be mindful of:
An Incomplete or Inaccurate Application
Failure to disclose your travel plans, lying about your income or weight can hamper your application process. If at any time, you’ve provided false information, the company has the right to cancel the claim.
Normally, if someone dies within the first two years of coverage, their insurer will thoroughly examine the application and the claim. If an inaccuracy or lie is revealed, the claim may be canceled.
Failure to Pay Insurance Premium
In case the policy lapses due to nonpayment and you end up dying before the terms are reinstated, the said beneficiaries won’t receive any death benefits. Insurers normally offer 30-31 days as a grace period in case a premium is late.
It’s possible that your insurer may extend this period due to COVID-19. However, if you think you won’t be able to offer premium, talk to your insurer beforehand. If you don’t, your coverage will end.
Living during COVID-19 is stressful and uncertain for many people. However, seeking life insurance is a definite way to reduce your anxieties and feel financially secure. If you’re looking for an insurance company to guide you, Pawson Insurance is here to help you.
Our agents can offer a hand in these trying circumstances and help you purchase a life insurance policy that fits all your needs. Get in touch with us!
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