How COVID-19 Impacted Life Insurance

Canadians are concerned about their health and safety as they prepare for the future.

Our team here at TIP Services is still receiving questions about the impact of COVID-19 regulations on the life insurance industry. We answer all your questions in this article.

Coronavirus & Life Insurance

• While the application requirements are largely unchanged, the execution has been modified to accommodate COVID-19 restrictions.
• More applicants have had their applications delayed or temporarily denied due to a COVID-19 diagnosis.
• Certain products let you get completely new underwritten policies even in the event of a pandemic.
• Even though the number of cases is increasing, the price of life insurance remains relatively stable.

Life insurance covers deaths related to COVID-19

Both current policyholders who have COVID-19 coverage and those looking to get it now are concerned about receiving the death benefit.

Policyholders can rest assured knowing that you are covered even if you die from complications related to COVID-19. People who apply now will be fully covered in the event of a death due to COVID-19. Once your application has been approved and makes your first payment, there is no waiting period.

The exceptions that exist are the same exception as pre-covid:

• Suicide in the first 2 years
• Additional clauses in your policy that exclude specific causes of death, such as a skydiving accident (uncommon)

These exclusions are applicable to those who enter the pandemic with an existing insurance plan or new policyholders.

Processing Life Insurance Application Remains Largely Unchanged

The actual steps remain relatively the same. You will go through the same medical checks and nurse visits as before. You can complete your health questionnaire online or by phone.

Extra precautions are taken for any industry that can’t be done over the phone or online. Additional PPE is required for nurse visits. It’s also recommended that you wear a mask during home visits. It is likely that you will also need to wear a mask if your nurse visit takes place in a laboratory.

A short COVID questionnaire is required at the end of the application process. This questionnaire asks you questions similar to those that may be asked before any medical appointments. This could include:

• Have you traveled within the last 14 days?
• Are you in touch with confirmed cases of COVID-19 or have you met someone with this case?
• Are you experiencing any symptoms of Coronavirus (e.g., sore throat, cough, loss of taste or smell, fever)?

Remember to answer every question throughout the application process. This includes general health questions and coronavirus-specific questions. Your life insurance provider may deny any future claims if you are found to have been intentionally false in your application.

If you have COVID-19, you may not be eligible to apply for life insurance

Although you can still apply right away, if you are currently suffering from COVID-19, the insurance company may delay your application until you make a complete recovery.

These delays have become more frequent as the pandemic continues.

These delays are caused by COVID-19 at different stages of the application process:

• Your application is still being processed. However, your life insurance provider must know if you have been diagnosed.
• If you indicate that you have COVID-19 at the beginning of your application, providers may ask you to wait until you are healthy to submit your application.
• There have been instances where applicants were denied completely because they contracted the coronavirus while submitting their applications.

Why? It’s estimated that around 20% of Canadians who contract COVID-19 are ‘long haulers’ with symptoms well beyond the two-week mark. These unknowns are not something that many life insurance companies are prepared to accept.

It is important to apply for your policy sooner than you think. You can eliminate all the delays and worries about not being covered once you have a policy in place.

It is unlikely that your travel history will affect your life insurance application

The only way past travel would impact your life insurance application is if you ended up catching coronavirus on your travels. You may be denied if you travel after becoming sick.

But, it is possible that any travel planned for the upcoming months could have an impact. The details of any trip planned for the next 12 months will be important to your potential insurer. It is a good idea to keep track of your planned travel locations, such as cities, regions, timing, and other details before you start the application process. This could cause delays to your application as non-essential travel is still discouraged.

While it won’t affect your premiums, it could impact the length of your application, especially if you don’t contract COVID-19 during your travels.

As of now, life insurance prices are not increasing as a result of COVID-19

The concern about life insurance price increasing is parallel to the increase of life insurance applications. Prices are rising because of the law of supply and demand.

If you have an existing policy then-No. Even during the coronavirus pandemic, the rate you secured will not change. Signing early is important as you get locked with a lower rate.

Prices for new plans have remained stable despite COVID-19’s additional risks. Prices for Term Life Insurance across the board haven’t seen this increase.

This is not a blanket statement. Some companies have hiked prices for certain permanent life insurance policies up to 27% for new applicants.

You Can Shop for Life Insurance Now

Yes. It’s actually easier to shop online now than at the beginning of the pandemic.

Everyone was looking for ways to migrate their practices online and abide by the safety protocols when meeting patients, clients, and customers. Although the application process is not yet fully online, there is more COVID-19-related information that will help make this process seamless.

You can make the application process easier by looking for policies with instant approvals. You can find companies that will provide you with a fully underwritten policy, based on the questions you answer. No nurse visits will be required.

Last Thoughts on Life Insurance and COVID-19

The industry will change as COVID-19 evolves. Different companies may have different policies for the same type of policy. Each policy should be tailored to your needs and budget. Coverage should be available to you at home so that you can get protection without breaking the bank.