Applying for Life Insurance During a Pandemic
How the process has changed and what to expect
The coronavirus has created an environment of uncertainty that affects everyone. As a result, more people are interested in buying life insurance. Before the pandemic, 36% of Americans who didn’t own life insurance intended to buy it. But since COVID-19, the number has jumped to 53%.
You may be wondering if you can still get life insurance during a pandemic, or whether life insurance companies will cover death due to coronavirus. We spoke with experts to find out what you need to know about applying for life insurance, what’s covered, and what’s changed.
Why Get Life Insurance?
There are many reasons people get life insurance. A study by Erie Insurance conducted during the pandemic found that these were the top five:
- To leave an inheritance
- To provide for funeral expenses
- To enable family members to maintain their standard of living
- To pay debts
- To allow a spouse or children to keep their current home
Life insurance protects people you care about and those who rely on you. It helps prevent your death from becoming a financial burden on others, like your children, parents, or spouse. But will you be covered if your death is due to the pandemic? The short answer is yes, but there are restrictions.
Are Pandemics Covered?
Life insurance covers many causes of death, including pandemic-related deaths. But if you do not have life insurance, you may be wondering if you can get it.
In an email to The Balance, a spokesperson for the consumer research organization LIMRA said they were unaware of any insurer stopping the issuance of new life policies as a result of the pandemic. In fact, some insurers have made life insurance purchasing more accessible:
“To make it easier for consumers to apply for a policy under these unusual circumstances, more than a quarter of U.S. life insurers have expanded their automated underwriting practices,” said the spokesperson. “One third [of] U.S. companies have postponed or waived paramedical requirements.”
Insurers are adjusting their practices so that medical exams are required less frequently, and the underwriting process moves faster.
Can You Get Life Insurance If You Had COVID-19?
A key consideration in being approved for life insurance and how much you’ll pay for that insurance is the condition of your health—if it’s suffered for any reason, you might have a harder time getting approved or getting approved for the lowest premium.
According to an Erie Insurance press release, you’re more likely to be approved if you were asymptomatic with a positive diagnosis than if you were hospitalized.
Are There Restrictions on Applications?
Yes, there may be. Because of the pandemic, some insurers are imposing age restrictions. “Many carriers limit or won’t write coverage over the age of 65, 70 or 75,” explained Quincy Branch, president and CEO of The Branch Company, Nevada’s largest minority-owned independent insurance agency, in an email to The Balance.
Certain kinds of travel can count against you. “Foreign travel is heavily scrutinized and [an insurer] may postpone coverage depending on the carrier and destination,” he said.
LIMRA shared similar insight: “Some companies reported they have added questions on COVID-19 exposure and travel to the underwriting process,” the spokesperson told us. “A small percentage of carriers are implementing face amount and premium limits for new coverage.”
Can You Get Life Insurance Without a Medical Exam?
Many insurers are offering policies that can be issued electronically from start to finish, waiving lab work wherever people qualify. It all depends on the underwriting the insurance company uses. Here are some examples of no-medical-exam underwriting and how they work:
- Guaranteed Issue: There is no medical exam required, and no health questions are asked (except, perhaps, if you’re terminally ill). Coverage is typically graded (limited) for the first two years, but issuance is quick. New York Life (partnered with the AARP), Transamerica, and AIG, are a few examples of top rated life insurers that sell guaranteed issue policies, among others.
- Simplified Issue or Accelerated Underwriting: Accelerated underwriting uses medical records and other data to evaluate your application, including financial history and motor vehicle records. Companies like Haven Life, John Hancock, Prudential, Lincoln Financial, Mutual of Omaha, and SBLI offer simplified issue, accelerated, or “instant issue” policy options for qualified individuals.
Accelerated underwriting is a streamlined process and, in many cases, policies are issued within a few days to a week without a medical exam or labs.
Will there be cases when you still need a medical exam and labs? According to Branch, yes, even with simplified or adjusted underwriting procedures, an exam may be required if your medical records haven’t been updated in over a year and for certain health issues.
Fortunately, if you have taken a life insurance medical exam in the recent past, you may be able to use that instead of taking a new exam. But even if an exam is required, insurers have instituted changes to make the exam process convenient and safe.
- Medical examiners may allow you to choose the location of the exam—for example, your home—allowing you to manage the environment you are in.
- Some insurers have extended the period for taking the medical exam.
- Expect medical examiners to be wearing gloves and a mask to keep you safe.
- You can get life insurance during a pandemic and, in some cases, even if you’ve tested positive for COVID-19.
- Many insurers offer simplified underwriting to make applying easier.
- Electronic applications are more widely accepted, and some companies offer complete online policy issuance.
- Those with higher pandemic-related risk factors, such as age, travel, or exposure to the virus, may have coverage restrictions or denials.