Skip to main content

How buying life insurance has been affected by the coronavirus….and why existing policies should still pay out for COVID-19 deaths

How buying life insurance has been affected by the coronavirus….and why existing policies should still pay out for COVID-19 deaths
(Image credit: pixabay)

Protecting loved ones financially should be a priority in normal times, but when a global pandemic as unforgiving as the coronavirus strikes, the importance of finding the best life insurance is thrown into even sharper focus. Thankfully, it won’t be too late for most Americans to arrange life insurance if they so wish, and provide the security for their families that seems increasingly hard to come by at present.

For the well-prepared who already have life cover in place, the likelihood is that their policies will pay out if COVID-19 should sadly lead to the worst. That said, some exceptions may apply, so using your time in lockdown to double check the finer details of existing plans might be sound advice.

Who can buy life insurance during the coronavirus pandemic?

Compare Life Insurance with Assurance

If you want to make sure your loved ones don't have to worry about their finances after your death then life insurance provides great peace of mind at a difficult time. Start your search for life insurance at Assurance and get custom quotes from multiple providers in your area.

For most healthy Americans, there should be few problems in buying the best life insurance right now, and the cover will typically cover coronavirus-related deaths.

The normal considerations before taking out life insurance will still apply; the type of life insurance plan that you need, how much cover you should get, what you can afford, and the things that will not be covered, all remain vitally important. 

Where people are likely to run into problems applying for life insurance is if they are already displaying symptoms of COVID-19, or have tested positive for it. This means you are unlikely to be able to get life insurance straight away, and are probably best waiting until you’ve recovered before you start to apply. 

Similarly, if you have recently been abroad - or have plans to do so in the coming months - this could affect your ability to get life insurance quickly. Most insurers are likely to insist that international travellers wait until they have been back on American soil for 30 days before they apply in order to ensure they do not subsequently display any coronavirus symptoms.

Applying for life insurance during the pandemic

According to some industry experts, anyone thinking of applying for life insurance should be comforted by the fact that the coronavirus has changed little in respect of the application process, the price of premiums and the underwriting that is applied. That said, the restrictions on movement imposed because of the outbreak may have repercussions for those taking out cover that would typically require a medical exam.

It may be the case that a face-to-face examination can proceed as normal. However, if it cannot, the life insurer might agree to an extension to the deadline imposed for the examination to take place, or be willing to accept recent medical records from your doctor instead.

Some may even consider foregoing the medical exam altogether, although in this instance, you should be aware that some policy restrictions can understandably expect to be applied. 

Are existing life insurance policies paying out for COVID-19?

The good news is that if you already own a life insurance policy, it should still pay out if you are unfortunate enough to succumb to coronavirus.

The only way a life insurance policy wouldn’t pay out for the coronavirus was if the policy specifically excluded paying for “pandemics,” or something similar - but thankfully such exclusions are extremely rare. 

How buying life insurance has been affected by the coronavirus….and why existing policies should still pay out for COVID-19 deaths

(Image credit: ShutterStock)

There are, however, a few other circumstances in which an insurer might be able to deny a claim, including failing to keep up to date with your premium payments. If you do make a late payment, most life insurance companies allow a grace period of around a month during which cover will still be in force. While the financial difficulties facing many Americans at present means insurers might extend this grace period during the pandemic, contacting your life insurance is a must if you are struggling to keep up with your payments.

Telling the truth when applying for life insurance is also vital if a policy is to pay out when it should. Be liberal with the truth over your weight, medical history, lifestyle or travel plans could give an insurer a valid reason not to fulfill their promise to pay out on a policy.

Finally, existing policyholders should make sure that the life cover that they hold is not one that pays out for accidental death only. Coronavirus would definitely not qualify for a pay out under such policies, which are designed to offer protection against death as a result of maybe a car accident or a fall. 

Final advice - shop around for life insurance

How buying life insurance has been affected by the coronavirus….and why existing policies should still pay out for COVID-19 deaths

(Image credit: pixabay)

The coronavirus is acting as a catalyst for many Americans who would normally think about buying life insurance to finally do so. While it is possible that life insurance rates may rise because of the pandemic, competition among life insurers looking to secure their share of this surge in new business should help to play a part in keeping premiums low. 

That said, as is the case with most financial products, it always makes sense for people looking to take out the best life insurance to shop around. The caveat to this is that premiums will vary significantly depending on the type of policy you take out and other factors such as your health and age. It may also be the case that the cheapest policy is not necessarily the best policy for you, especially if the lower price is a result of exclusions that you want to be covered for. 

Knowing the type of life insurance you want and how much coverage you need is key to finding the best life insurance quote for you.

With over 20 years’ experience in the financial services industry, Tim has spent most of his career working for a financial data firm, where he was Online Editor of the consumer-facing Moneyfacts site, and regularly penned articles for the financial advice publication Investment Life and Pensions Moneyfacts. As a result, he has an excellent knowledge of almost areas of personal finance and, in particular, the retirement, investment, protection, mortgage and savings sectors.