The wellbeing of our loved ones is something that is always on our minds, especially in the age of pandemic and social unrest. Life insurance is one of the top ways to assure their future in case of a disaster.
According to Forbes, 30% of people have considered getting life insurance during COVID-19. Many insurance providers, like AccuQuote, have even seen their applications increase by up to 30%.
You need to know about any new processes and restrictions that have arisen from these unprecedented times, before buying insurance. Preparing yourself can help you get a better policy, lower premium, and put your mind at ease for your family’s future.
Term Life vs. Whole Life Insurance
Before we dive into the details about the changes, let’s go over some basics. There are two main types of life insurance plans:
Whole life insurance, as the name implies, gives you insurance that covers you until you die. Your policy won’t expire, no matter how long you live, and your family will get the death benefit.
Term life insurance expires after you reach a certain age, as determined by your coverage. This age varies based on your policy and provider, but many insurers offer 10, 20, or 30 year coverage. If your term life policy expires before you die, your family doesn’t get the death benefit.
Is It Harder to Get Life Insurance During COVID-19?
In one word - yes. Since the outbreak of the pandemic, many companies have made it easier to qualify for life insurance while making it harder to get access to policies.
Earlier in this year, companies could not do in-person exams that involved blood and urine tests or weight checks, giving them fewer criteria with which to reject applicants. Now, many companies are offering medical exams with more safety precautions for doctors and patients, as well as online or over the phone health questionnaires.
While it may sound like you can qualify more easily, some companies stopped distributing certain policy types. For instance, Penn Mutual Life Insurance and Mutual of Omaha both put a hold on giving policies to people age 70 or older. Prudential also temporarily discontinued offering 30-year term life plans.
If you’ve traveled to a high-risk area or outside the country, that can impact your coverage. Insurance is calculated based on risk, and the more traveling you do, the more risk it puts on your insurance company. That means they’re more likely to deny you coverage or hike your premiums.
How Have Life Insurance Companies Changed Their Policies?
During the pandemic, many insurance companies have made changes to their policies. While some of these changes may last for the foreseeable future, others have gone into effect on a more impromptu basis.
The most significant changes you’ll see when you apply for life insurance include:
- Underwriting
- Premiums
- Health condition requirements
Before you purchase your policy, make sure you understand how the company has adjusted to meet recent demand.
Underwriting Changes
According to Insurance Business America, a LIMRA survey has shown that over 25% of insurance providers have expanded their automated underwriting processes to make more accurate determinations for applicants. Automated underwriting uses algorithms and artificial intelligence for underwriting decisions.
Many companies have also used accelerated underwriting, especially for younger, healthier individuals. That doesn’t mean that every young, healthy person can qualify for this, but it can speed up the application process at the expense of more approval requirements.
Lastly, consider the contestability period for your application and be honest about whether you’ve traveled recently. Lying on an application—during COVID or not—can prevent your family from receiving the death benefit from your policy.
Premium Highs and Lows
Because of the higher risk the pandemic presents to insurers, you may pay higher premiums. If you’ve been diagnosed with COVID-19, your provider may assign you a lower health classification that comes with a higher premium.
On the other hand, if you get COVID, recover fully, and then apply for insurance, you probably won’t see much difference in your premiums.
For people who had life insurance before the pandemic, some insurance companies have adjusted their grace periods from 30 to 90 days due to unemployment. Some states have even prohibited providers from collecting late fees and enforcing penalties for missed payments.
Adjustments for Health Conditions
Some insurers have modified the process of assessing and disclosing health conditions. Others, like Mutual of Omaha, SBLI, and TransAmerica, offer no medical exam policies.
Many questionnaires now ask whether you’ve had COVID-19 or if you’ve been exposed to someone who has. Getting medical records has taken longer, which delays the approval process, and traveling can make these health assessments more complicated.
After many states enforced policies regarding quarantining and social distancing, some people have stayed outside their home state. As a response, some insurers now require that your paperwork match the state you currently live in, rather than your legal state of residence.
Which Insurance Brokers Can Help You Get Life Insurance During COVID-19?
If you’re considering purchasing life insurance during COVID-19, you should know how and where to look to get the right policy for you. These brokers can help you find one that gives you everything you need with reasonable requirements.
| Provider | Medical Exam Needed? |
|---|---|
| Bestow | ✗ |
| Ladder | ✗ |
| HavenLife | ✗ |
Bestow
Bestow brings the process of buying term life insurance entirely online. With this company, you don’t have to go through an agent to buy life insurance or submit to a medical exam. Answer some questions and Bestow will offer you instant quotes for policy options with up to $1 million in coverage. There are some limitations, though. Bestow only issues policies to people under 55 and terms are limited to 10 and 20 years. Read the full review.
Ladder
Ladder offers term life insurance online issued by Fidelity Security Life Insurance Company. U.S. residents aged 20 to 60 can apply for coverage online and get an instant decision. As its name suggests, Ladder’s policies are designed to allow users to move their coverage amount up and down by applying online for more coverage or decreasing coverage with a few clicks as their needs change. Read the full review.
HavenLife
Haven offers a quick and painless way to apply for term life insurance, and has become a popular choice since it was founded in 2015. While it only offers term life insurance, this focus means that it is able to focus on delivering a quality service with competitive terms and rates. Read the full review.
Time to go shopping
It is still possible—and even advisable—to get life insurance during COVID-19. If you have an existing policy, it should cover you in case of your death due to coronavirus.
If you’re considering buying life insurance now, determine your risk first. Then, talk to an insurance broker like the ones we covered here to find the right policy for you.
Ready to buy a policy? Check out recommended life insurance providers here.
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