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Life insurance and coronavirus: Everything you need to know
Does life insurance cover pandemics like the coronavirus?
Updated . What changed?
The short answer is: If you already have a policy in place, you’re covered for COVID-19. If you haven’t yet applied for a policy, you could face delays in approval.
What's in this guide?
- Is the coronavirus covered by life insurance?
- Can I apply for life insurance during the coronavirus pandemic?
- Will the coronavirus affect life insurance policies in the future?
- Are insurers still performing medical exams?
- Will life insurance premiums increase due to the coronavirus?
- Will my insurer cancel my policy if I can't pay my premiums?
- How major insurers are handling the coronavirus
- Compare life insurance companies
- Should I get life insurance during a pandemic?
- What's not covered by life insurance?
- How do I file a claim for a coronavirus-related death?
- Bottom line
- Frequently asked questions
Is the coronavirus covered by life insurance?
Yes. There is no pandemic or epidemic exclusion for life insurance. This means if you have an active life insurance policy and continue paying premiums, your beneficiaries will receive a payout if you die from COVID-19 or related complications. And if you have a permanent policy, you could use the cash value to pay the bills for your family or business if you need financial help right now.
Are there any exceptions?
Yes — though they’re not all unique to coronavirus-related deaths. Your insurer might not pay out your policy in these cases:
- You lied on your application. Life insurance applications are legally binding documents. If your insurer discovers you were dishonest in your application, they have the right to delay the payout to your beneficiaries while they investigate, or deny it altogether.
- Your policy lapsed. If your policy lapsed and you died before getting it reinstated, your beneficiaries won’t receive any money. That being said, many insurers are extending grace periods and pausing policy cancellations for non-payment, so there’s some leeway at the moment. Contact your insurer to discuss your payment options if you’re facing financial hardship.
- You purchased an accidental death & dismemberment (AD&D) policy. These policies cover accidental deaths and injuries — but they don’t pay out if you die due to an illness, disease or underlying medical condition.
If I get the coronavirus, can I use my living benefits riders?
It depends on the severity of your diagnosis, and whether you purchased riders with your policy.
If you contract coronavirus and can’t work, you might be able to use your waiver of premium rider to pause your premiums for a certain amount of time, or your disability income rider to pay out monthly benefits.
An accelerated death benefit rider only comes into play if you’re diagnosed as terminal. If that happens to you as a result of COVID-19, you may be able to access up to 75% of your death benefit — just know that this amount will be deducted from your beneficiaries’ payout.
Can I apply for life insurance during the coronavirus pandemic?
Yes. While the coronavirus is an evolving pandemic, it shouldn’t affect your ability to apply for life insurance. Many life insurers have started including coronavirus-related questions during the health questionnaire or exam part of the application, so you’ll need to disclose whether you tested positive for coronavirus or were treated or hospitalized.
Your insurance company might postpone your application if you’re exhibiting COVID-19 symptoms, or have recently visited any destinations with Level 4 travel warnings from the Centers for Disease Control and Prevention (CDC).
The time you’ll have to wait for coverage varies, so ask your insurer about the timeframe. Your insurer will likely require you to be back in the US for weeks or months before they approve your policy to ensure you haven’t caught the coronavirus.
Similarly, if you contract COVID-19 and then apply for life insurance, your insurer will likely require you to fully recover before issuing a policy.
Will the coronavirus affect life insurance policies in the future?
It’s possible. As insurers start to see an influx of death claims, you may experience longer wait times for approval — or be denied coverage altogether.
While there haven’t been any far-reaching moves across the industry, some insurers have added stipulations to applications for potential policyholders:
- AIG is no longer accepting applicants aged over 80 with serious health conditions
- John Hancock has added questions to their application about your recent travels — with a special focus on cruise travel — and whether you’ve had contact with anyone who has contracted coronavirus
- SBLI has reduced its approval rate for applicants who fall in the substandard category, while those aged 60 must be in good health.
Are insurers still performing medical exams?
Yes. In most states, applicants can schedule a life insurance medical exam at a time and place that’s convenient for them — like their home. The technicians have rigorous safety procedures in place to protect themselves and applicants from contracting the virus.
There are a few exceptions. If you’re sick — especially with a fever or respiratory symptoms — your insurer may postpone your medical exam for 14 days or longer.
If you’re not comfortable taking a medical exam at this time, talk to your insurer. They may be willing to delay the exam and issue a temporary policy in the meantime. Some insurers are waiving the exam completely, while others — like AIG and Cincinnati Life — are accepting Attending Physician’s Statement (APS) with the results of your recent physical instead.
Can I still purchase a no medical exam policy?
Yes — for now. Most insurers who offer no medical exam policies are still issuing coverage.
If you want to take this route, look into these policy types:
- Simplified issue life insurance. This skips the medical exam, but still requires you to complete a health questionnaire.
- Guaranteed issue life insurance. Anyone can apply for this policy, and coverage is guaranteed — no questions asked.
- Final expense insurance. Issued in small amounts, this policy is designed to cover end-of-life expenses, like funeral and burial costs and unpaid medical bills.
Which insurers are offering no medical exam policies?
These are some of the insurers that are still issuing no medical exam policies:
- American National
- Banner Life
- Foresters Financial
- John Hancock
- Lincoln Financial Group
- Mutual of Omaha
- Pacific Life
- Protective Life
The amount of coverage you can get varies between insurers, and comes down to your income and other underwriting factors.
Will life insurance premiums increase due to the coronavirus?
If you have an active life insurance policy, your life insurance premiums won’t change.
For future policies, life insurance companies set premiums based on a range of factors, including life expectancy. A pandemic increases your chances of mortality, so you can expect to pay a higher premium if you take out a policy during the coronavirus.
On the same note, if you contract and recover from COVID-19 and then apply for a policy, your insurer might still assign you a higher risk rating — and a higher premium.
Will my insurer cancel my policy if I can’t pay my premiums?
Probably not. Many state insurance departments have instructed insurers to offer their policyholders financial help in the form of later due dates and flexible payment plans.
Some insurers have also extended grace periods and due dates of their own accord.
If you know you can’t make your premium payment, contact your insurer as soon as possible to discuss your options.
How major insurers are handling the coronavirus
Finder contacted a range of top life insurers across the US to ask whether they have exclusions in place relating to the coronavirus. These were the replies we received as of March 20, 2020.
|Allianz||March 17||No comment at this time.|
|Guardian||March 20||No comment at this time.|
|John Hancock||March 19||No comment at this time.|
|Lincoln Financial Group||March 18||“If the insured has an in-force policy prior to the outbreak and passes away from it, there are no exclusions that would impact the payment of a death benefit caused by COVID-19 or other epidemic/pandemic infection.|
However, if an insured has been diagnosed with coronavirus, and is still in their contestability period (generally 2 years from the policy being issued, varying by state law), but did not disclose that during underwriting or delivery, that could result in a material misrepresentation review and possible rescission, as is true with other unadmitted medical conditions.
Currently, we have imposed a 30 day waiting period for most applicants who confirm foreign travel to any Level 3 country listed on the CDC website before offering a new policy.”
|Prudential||March 20||“Prudential does not currently have any travel riders or restrictions in place on life insurance policies.”|
|State Farm||March 19||“For life insurance claims stemming from COVID-19, our normal claims procedures are followed. Generally speaking, our life insurance policy would typically cover deaths due to a pandemic or due to a virus labeled as a pandemic.”|
Compare life insurance companies
Should I get life insurance during a pandemic?
During a global health crisis like the coronavirus, it’s natural to worry about protecting your family and whether a new insurance policy will cover coronavirus.
If you have loved ones that would be financially burdened if you died, it’s a good idea to look into life insurance. That way, they’ll have the money they need to pay for living expenses and maintain their lifestyle when you’re no longer there to provide for them. And if you have assets to protect or cosigned debt like student loans, it might be worth buying a policy so those obligations aren’t passed on to your family if you die prematurely.
On the other hand, if you have the savings to self-insure or don’t have dependents, assets or outstanding debt, life insurance may not be as important to your financial planning.
What’s not covered by life insurance?
During a pandemic like the coronavirus, your policy’s typical clauses apply. Your insurer won’t pay out your policy if you commit suicide within the first two years of taking out a policy or die while committing a serious crime. They also won’t pay out your benefit if you die in a way that’s listed as an exclusion in your life insurance policy — like racecar driving or recreational flying.
What happens if I lie about my travel plans?
Your beneficiaries might not receive any money when you die. All life insurance policies have a contestability period, which means your insurer can investigate your death if you die within the first two years of taking out a policy.
If your insurer finds out that you lied or withheld information about travel to affected areas, the company has the right to delay or deny the death benefit while investigating your claim — even if you didn’t die from the coronavirus.
Life insurance is a legal contract, and you must be completely transparent in your application or risk denied claims.
What is a pandemic?
A pandemic is the rapid spreading of a disease worldwide, according to the World Health Organization (WHO). It’s different from an epidemic, which refers to the spread of disease in a contained population or region.
WHO declared COVID-19 a pandemic on March 11, 2020.
How do I file a claim for a coronavirus-related death?
The life insurance claims process is the same for all life insurance policies. If you’re a beneficiary, contact the life insurance company that holds the policy, and have the policy number handy.
The insurer will likely ask you to complete a claims form and submit documentation. This might include a certified copy of the death certification and any supporting documentation, such as a police report.
What can I use the life insurance payout for?
Beneficiaries can use the money however they wish. Many choose to use the proceeds of a life insurance policy to cover the funeral and burial costs, medical bills, mortgage or rent payments, childcare and college tuition.
If you already have a life insurance policy, the coronavirus outbreak should have no impact on your coverage and your beneficiaries’ death benefit. But if you’re hoping to apply for a policy, you might have to wait for approval, especially if you’ve traveled to one of the areas on the CDC’s restricted list.
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Finder Editorial Review Board Member: Marguerita M. Cheng, CFP
An award-winning advocate for ethical financial planning, Cheng has been helping Americans meet their life goals for over 20 years.
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