Understanding Life Insurance During the Pandemic
Life insurance can be described as a lump sum amount of money that your heirs receive in case of your death during the term of the policy. Its purpose is to provide stability and a sense of security for an uncertain future. Obtaining life insurance during the pandemic may be a wise option for most.
People opt for life insurance hoping that their loved ones will be financially secure even if they happen to unexpectedly pass away. The money families receive from insurance is thus mostly used to pay mortgages, afford health and childcare, and other similar activities.
As the pandemic has taken millions of lives, the fear of an unprecedented and uncertain future stands tall. Therefore, getting life insurance now is more important than ever before. However, there are a few things to know before buying a life insurance plan amidst the pandemic.
What Has Changed?
While the pandemic has greatly affected the insurance sector, life insurance, in particular, has shown stability and steadiness. Contrary to expectations, insurers have neither started charging exorbitant premiums nor pulled out of the market altogether.
If anything, insurance continues to be readily available with coverage for COVID-19 policies. And people are already receiving payment for their COVID-related claims.
What has changed, though, is the initial process of filing for the insurance. The application form now includes an introductory list of COVID related questions such as, in the past 30 days, have you been:
- In direct contact with someone diagnosed with or suspected to have COVID-19?
- Diagnosed with COVID-19?
- Asked to quarantine or self-isolate?
- Experiencing any symptoms of COVID-19?
If your answer to any of these questions is yes, then it may take a little longer for insurers to process your application. They may postpone your request until further notice, by waiting for your recovery from COVID or quarantining to end before proceeding.
In case of a pre-existing health condition, you may still get a cover. However, this will largely depend on the severity and intensity of your condition and whether it is related to a disease (such as diabetes and asthma) that makes you more susceptible to the virus.
In the latter case, insurers may be deny you life insurance as they are becoming increasingly selective with whom they insure. Moreover, they may charge a much higher premium, even if they decide to give you coverage.
The Bottom Line
While the life insurance sector has been paying out steadily for COVID claims, the process may be a little difficult for those applying just now. If you can clear the initial screening and requirements, the process is smooth from there on out.
However, it is important to keep in mind to disclose all information. Especially when it comes to answering the COVID-related questions honestly. If the insurer later catches any misinformation on your part, they are very likely to reject your application altogether.
