27 September 2023

A sure thing: Why now is the time to think about life insurance

Start the conversation

Alex Gailey* says now is the time to consider life insurance or to double check the coverage of your current policy.

As a result of the COVID-19 pandemic, the uncertainty and brevity of life has been called back into focus.

Many people are considering life insurance or rethinking their current policy all together.

The life insurance industry is one of several industries that’s facing a large surge in demand in the shadow of the novel coronavirus, suggesting that healthcare professionals and general consumers are currently thinking about their finances in case of death.

For example, New York Life Insurance reports online searches for “life insurance and coronavirus” have risen more than 250 per cent since early March based on data collected by Google Trends.

Luckily, it’s not too late to get life insurance and there’s good news for people who already have it.

Kevin Brayton, head of sales and distribution for Prudential’s individual life insurance group, says most individuals who already have a life insurance policy are likely covered if they pass away due to COVID-19 complications.

“While I can’t speak to the policies of other carriers, Prudential’s policies do not currently have exclusions for pandemic events,” Brayton said.

Do I need more life insurance coverage because of COVID-19?

If you already have life insurance, you’re likely automatically covered during the pandemic.

However, new life insurance applications may be affected by the outbreak.

Brayton recommends life insurance be considered for adults of all ages, particularly when you have financial debts that would not be covered if you pass away.

Life insurance can be a way of securing that your debts are paid off after death, such as student debt, a mortgage, or even loans associated with a business.

“Obtaining life insurance during the coronavirus outbreak is certainly possible,” Brayton said.

“Some accelerated underwriting programs may even offer the option to complete applications and paperwork entirely online, in an expedited manner, and a paramedical exam may not be necessary.”

Depending on your insurance agency, your existing coverage should not need any coronavirus-specific adjustments.

What are the restrictions on new life insurance coverage during the pandemic?

Each insurance company is handling the pandemic differently, and it’s important to choose a company that meets your needs.

If you’re thinking about getting life insurance, it’s important to submit your application before your health is affected.

In general, anyone who tests positive for COVID-19 will not be eligible for life insurance until after they are cleared by a doctor, Brayton says.

Recent travel to countries with high rates of COVID-19 transmission may also have an impact.

Brayton says most carriers ask life insurance applicants: “Will you live or travel outside the country within the next 12 months?”

If the answer is “yes”, then they will ask for additional details.

Your application might be postponed for a short time, but it doesn’t prevent you from obtaining coverage.

“If someone has been diagnosed with COVID-19, we postpone the application for a period of at least 30 days from the date of diagnosis,” Brayton said.

“After 30 days, if the applicant has fully recovered, an application can be submitted for consideration.”

However, he said these changes do not currently impact the underwriting process for unaffected applicants.

“This is a rapidly evolving situation and we’ll continue to assess and adjust our underwriting approach as necessary,” Brayton said.

What if I can’t afford life insurance payment because of COVID-19?

Life insurance premiums and claims will vary by issuer.

If you’re worried about your life insurance payments, contact your insurer as soon as possible.

“If you and your family cannot afford your life insurance payment you should reach out to your agent and discuss ways of lowering your payment or cheaper options of coverage,” said Marissa Warlow, a licensed insurance agent with New York Life Insurance.

“All in all, if you are in need of life insurance and you are healthy, the time to apply is now.”

* Alex Gailey is a finance writer and contributor to The Simple Dollar. She tweets at @alex_gailey.

This article first appeared at www.thesimpledollar.com.

Start the conversation

Be among the first to get all the Public Sector and Defence news and views that matter.

Subscribe now and receive the latest news, delivered free to your inbox.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.