COVID-19 has changed many aspects of life. It may also have changed life insurance, at least in some ways. More than two years into the pandemic, it appears that COVID has had an impact on life insurance demand, and it has also had some impact on underwriting. However, there are also many misconceptions about the virus and the vaccine and COVID’s impact on life insurance.
Demand for Life Insurance
Before the pandemic, many people who needed life insurance lacked coverage. COVID was the push that some of them needed to purchase a policy. According to a survey from PwC, 15% of respondents said they were likely to purchase life insurance because of the pandemic.
Many of these people followed through. According to U.S. MIB Life Index, life insurance application activity grew 3.4% year-over-year in 2021, and activity was up 7.4% from 2019 to 2021. Applications for term life insurance policies were actually fairly flat in 2021, but universal life insurance policy applications increased by 3.0% and applications for whole life insurance increased by 8.3%. This indicates much greater increase in permanent policies with living benefits.
Accelerated Underwriting
Although demand for life insurance increased because of the pandemic, the pandemic also made it harder for people to get the medical exams needed for the application.
According to Investopedia, many insurers addressed this by changing their underwriting practices. Some relied on physician statements and remote screenings, and many insurers increased the limits available through accelerated life insurance policies, which don’t require a medical exam.
Misconceptions about the Vaccine
There have been some rumors that people who receive the COVID vaccine will not be able to get life insurance coverage or that they will have their life insurance policies voided. These rumors do not have any basis in reality.
Reuters Fact Check says that people who have received the COVID vaccine are not being denied life insurance as a result, despite a video that claims otherwise.
Likewise, if you have a policy already, your life insurance policy will not be voided just because you got the COVID vaccine.
COVID Infection and Insurance
When you purchase life insurance, whether it’s term or permanent life insurance, you agree to the policy terms. The insurer will not change the terms to retroactively exclude COVID.
Policyholders who die from COVID-19 will still be covered, according to Investopedia, and their beneficiaries will still receive the death benefit, just as they would if the policyholder died of another disease.
Securing coverage when you are currently seriously ill may be more difficult, and the coverage available may be more expensive and limited, but this is not specific to COVID. Likewise, if you lie on your application or misrepresent your health or medical history, your coverage could be voided. However, if you are healthy when you apply for coverage and then you get sick, you should still be covered, whether the illness stems from COVID or something else.
Long COVID and Life Insurance
Life insurance is often subject to medical underwriting, meaning that applicants may have to have a medical exam before being offered coverage, and the life insurance underwritings may consider the applicant’s medical history. Because of this, some people have wondered whether a previous diagnosis with COVID could impact eligibility, especially if long COVID symptoms are involved.
According to the CDC, long COVID issues can include a wide range of symptoms, from general fatigue to sleep problems, difficulty breathing, stomach pain, depression, anxiety and joint or muscle pain, just to name a few. The symptoms may last for months and there is no way to test for long COVID. Mayo Clinic says that some people with post-COVID health issues may have experienced organ damage.
There’s still a lot that is not known about long COVID, so it’s difficult to say how long COVID will impact medical underwriting in the future. If a person has a serious medical condition, whether or not the condition is linked to a COVID infection, the person may be denied coverage or charged higher rates. However, just having had COVID at some point should not disqualify a person from being able to buy coverage.
Finding Coverage
If you already have life insurance, you shouldn’t have to worry about losing coverage because of COVID. See your policy terms for limits or exclusions, but don’t worry just because of a rumor circulating online.
If you want to buy term or permanent life insurance, you can still apply. However, based on your health conditions or age, you may have a harder time securing coverage. For example, according to AARP, some large insurers restricted sales of life insurance to people over the age of 80 because of the pandemic and the increased risk.
This does not mean that it’s impossible to find coverage. Life insurers are still writing policies, and many people qualify. Some insurance carriers may be more willing to provide coverage, and certain policy types – such as guaranteed issue life insurance – might be a good option for individuals with pre-existing conditions.
Do you need help finding life insurance coverage that meets your needs? Contact a professional at PTT Financial.
