What is COVID-19?
Coronavirus disease (COVID-19) is an infectious disease caused by a newly discovered coronavirus. Most people infected with the COVID-19 virus will experience mild to moderate respiratory illness and recover without requiring special treatment. Older people, and those with underlying medical problems like cardiovascular disease, diabetes, chronic respiratory disease, and cancer are more likely to develop serious illness.
Can You Get Life Insurance If You Have COVID-19?
Currently, insurers are asking people to wait until they have recovered from the coronavirus to apply for life insurance. When applying for a policy, you’ll be asked to disclose your medical history, including whether you are currently ill. Some companies are specifically asking applicants if they have been treated for COVID-19. Because the coronavirus can make someone terminally ill so quickly, you likely won’t even be able to purchase a guaranteed issue policy, a type of life insurance that doesn’t require a medical exam or extensive health questions and offers a relatively small death benefit.
Has COVID-19 Affected The Life Insurance Application Process?
Insurance companies are responding to the pandemic in different ways, with some companies restricting applications based on recent travel history. While most insurers continue to issue life insurance policies, this could change as the situation evolves. For now, buying life insurance has changed in a few key ways in the wake of the coronavirus pandemic, including:
Delays in getting life insurance if you’ve recently traveled internationally, plan to, if you currently have the coronavirus or your insurer needs your medical records.
Medical exams and records are required for most types of life insurance applications. Americans are being instructed to follow social distancing guidelines that include avoiding unnecessary travel and human interaction. Some insurers offer a virtual application process that allows approved applicants to receive life insurance without a medical exam.
Past travel history and future travel plans to high-risk areas for the coronavirus may affect whether you can apply for a policy immediately before and after travel.
Life insurance rates have remained the same as before the pandemic, but this could change in the future.
Additionally, some life insurance policies require an in-person medical exam, so the process will be delayed if you live in a state where such visits are restricted by stay-at-home orders. You can shop for no-exam policies, but they tend to have higher premiums and lower benefits.
Will Your Travel History Affect Your Rates?
Applicants are usually asked to disclose any international travel plans when applying for life insurance. While this information is still usually required, now there also are waiting periods for anyone who has traveled anywhere overseas. However, this guidance is fluid and could change, and insurers may place additional restrictions.
How Stay At Home Mandates Could Affect Your Application
If you are quarantining in a state other than the state you permanently reside in, this could have implications for your residency on your life insurance application. Some life insurance companies are requiring that your paperwork match the state you are currently in, even if it is not the state you actually reside in. Others are still accepting paperwork for the state you permanently reside in. Because this varies for each life insurance company and application, you’ll want to discuss how to proceed for your application with your life insurance agent.
Some insurance carriers have begun adding exclusion riders on newly issued policies. Basically, this means they issue the life insurance contract, but they include dialogue that specifically voids them of liability if the cause of death has any relation to the COVID-19 virus.
An exclusion rider would read something like: This Insurance does not cover any claim in any way caused by or resulting from:
- Coronavirus disease (COVID-19)
- Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)
- Any mutation or variation of SARS-CoV-2
An exclusion rider such as this could become an industry standard if the morbidity rate causes carriers to experience detrimental financial losses due to an unexpected and unsustainable claims rate. Again, these exclusions would start on a life insurance company by company basis.
Limiting The Age of New Applicants
Some life insurance companies have lowered the max for new applicants on some of their products. For example, some companies that use to accept new applicants up to age 85 now only accept applicants who are 75 or 80. Many life insurance companies have taken this action to limit their risk since the elderly are much more vulnerable to COVID-19.