The duration of COVID-19 is unknown and continues to spread globally. As a result, many insurance carriers are on high alert. If you have an existing life insurance policy, you're covered for the term of that policy. Therefore, you don't have to worry about cancellations. The provisions of your policy will remain the same regardless of COVID-19. If you don't currently have a life insurance policy and you're seeking coverage, there may be new changes that can either delay or deny your application.
Age Limits & Higher Premiums
At Alliance Insurance Agency, we're closely following CDC guidelines and how it's impacting insurance coverages. Because of the unpredictability of the coronavirus, some insurance companies have implemented age restrictions for new applicants. The cost of life insurance increases with age, so it's best to purchase sooner rather than later.
Testing Positive for the Coronavirus
If you currently have the coronavirus and test positive during a physical exam, it's unlikely your application will be denied. Most insurance carriers are delaying approval until after a full recovery. Approval delays can range from 15 to 30 days. However, if you suffer severe symptoms from Covid-19, the approval times are longer. Some insurers have postponed approval by as much as 90 days or until a full recovery.
Delay Due to Recent Travel
There is also the possibility your application may be postponed if you've recently traveled outside of the United States or came in close contact with someone that tested positive for the coronavirus. An insurance carrier may also request a statement of good health before approving an application. Each life insurance company has different underwriting procedures, so approval times can vary.
No Medical Exam Policies
There are insurance policies that don't require a medical exam, but they often lack optimal coverage. Even with the current pandemic, there are options available, but the coverage typically maxes out around 250,000. The premiums are much higher than a traditional policy that requires a medical exam. Therefore, avoid waiting until a medical emergency to seek out life insurance. If the coronavirus worsens, there is also a possibility that no medical exam policies may be suspended until the coronavirus subsides.
Final Expense Insurance
If you're unable to acquire traditional life insurance due to COVID-19, you may want to consider final expense insurance. Final expense insurance covers end-of-life expenses. As a result, the coverage amount is relatively low. The upside is that it's guaranteed. A medical exam is not required, and if you're able to pay the monthly premiums, you're covered. Coverage can go as high as $40,000, but coverage maximums vary.
In conclusion, it's best to have a life insurance policy should the inevitable occur. The coronavirus brings new challenges to acquiring life insurance, but many of these challenges can be avoided by proactively purchasing coverage before becoming sick. Whether you decide on a traditional, no medical exam, temporary, or final expense policy, you are guaranteed a payout at the time of death. To learn more about existing life insurance options, feel free to contact us at 303-279-9700.