Coronavirus and Your Life Insurance: A Practical Guide

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 health care professionals and general consumers are currently thinking about their finances in case of death.

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    For example, New York Life Insurance reports online searches for “life insurance and coronavirus” have risen more than 250% 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.

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    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. MetLife is one of the large insurance companies that’s not making changes to group insurance policies that are already active.

    Phil Bruen, vice president of group benefits for MetLife, says, “the policyholder or family member will be covered due to a loss of life resulting from COVID-19, provided all requirements of the policy and certificate are met.”

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      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 is not be eligible for life insurance until after they are cleared by a doctor, Brayton says.

      Recent travel to countries with high rate of COVID-19 transmission may also have an impact. Brayton says most carriers, including Prudential, ask life insurance applicants, “will you live or travel outside the United States 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 period, 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 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. All in all, if you are in need of life insurance and you are healthy, the time to apply is now.

      Several insurance companies have created COVID-19 resource hubs that provide Q&A sections for policyholders, as well as designated programs for coronavirus relief. If you’re wondering which insurers are responding to COVID-19, we complied a list of major insurers providing relief to policyholders and tips on how to reach out.

      Experts Cited

      Phil Bruen

      J. Philip Bruen

      Phil Bruen is the vice president of product development, management and compliance for MetLife’s group insurance benefits. Phil joined MetLife in November, 2013. Prior to MetLife, Phil held a variety of sales, marketing and product leadership roles at another major life and disability carrier.

      Kevin Brayton

      Prudential Life

      As executive vice president of Prudential’s individual solutions group, distribution and sales team, Kevin Brayton lead sales strategy and execution across individual life insurance producing segments. Kevin is a graduate of the University of Connecticut with a bachelor’s degree in economics and an MBA graduate of the University of Massachusetts.

      More Resources

      At the Simple Dollar, we have been following COVID-19 since the start. Check out the articles below for resources and the latest news on financial relief from the coronavirus.

      Alex Gailey

      Financial Reporter

      Alex Gailey is a financial reporter at The Simple Dollar who specializes in banking, deposits, mortgages and personal finance. Her writing has been featured in Yahoo Finance, MSN, Atlanta Business Journal, Charlotte Business Journal, The Boston Globe, and elsewhere.

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      • Victoria Lurie
        Victoria Lurie