The events of the last two months have brought plenty of craze to the insurance world, specifically life insurance. I am using this post to outline and provide clarity around life insurance planning during this time time of a virus outbreak.
People are looking for life insurance due to the coronavirus.
Should people panic and buy life insurance?
The best practice for whether to buy insurance depends on your individual needs. Despite coronavirus, you either need a policy to protect family, business, estate, etc., or you do not. The coronavirus certainly can cause you to think about your plan, as there is no cure at the moment, which draws concern to folks without a plan in place. However, the virus is no different from any other health scare or accident – cancer, heart attack, car crash – all these events will prompt you to rethink your plan and get coverage in place.
Follow this link to learn more about the different types of life insurance.
What should people know and look for that are interested in
buying a policy right away due to the pandemic?
Complete an application while you are healthy. If you wait and contract illness, the insurance companies will review your medical records and may have hesitation to approve your policy at the preferred rating. Worse yet, hospitalization or death could seriously impact your chances of an approved policy.
Are there any exclusions people should be aware of?
If you are healthy and need coverage get it. Do not wait. The younger and healthier you are, the more favorable the cost. It is uncertain how the underwriters at the insurance companies will consider an illness, such as the coronavirus, when reviewing insurance applications.
What could keep someone from being able to get a life
insurance immediately? How long should they expect it to take
for the policy to start?
Insurance policies are largely based on your health and age. If you are old and have poor medical history, chances of getting a policy approved would be difficult. Previous medical history with life threatening illnesses, such as cancer, can also impact your ability to obtain coverage. Having bad habits, such as using tobacco, or a bad driving record, such as multiple DUI’s, also impact your ability to get an approved policy at the best rate. Policies can start at the time of application with what is referred to as “Temporary Life Insurance Coverage”. This coverage begins at the time of application, so the applicant has coverage while waiting for the full underwriting process to be complete. Applications can take a week to as long as a couple of months, depending on the applicant’s medical and lifestyle background. Also worth noting, if the applicant has recently traveled abroad to the virus hotspots, this too could cause a postponed application. Ultimately, the insurance companies are looking at the applicant and asking the question, how big of a risk is this person?
This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.