Written by- Nick Chapekis, CIC, CRM
It’s pretty much common knowledge now that illness from the COVID virus is covered by health insurance. However, what about life insurance? Fortunately, dying from COVID is not excluded by life insurance policies, but if you have, or have had, COVID, qualifying for a new policy may present some issues.
First, one must understand life insurance underwriting, which is a process where insurance companies assign an applicant a classification to indicate the level of risk (i.e., the probability that the applicant will die during the policy term and trigger the death benefit payment). For example, if you are a smoker, you will likely face higher premiums than someone who has never smoked. Your policy is priced according to your rating factors, which also include age, gender, and medical history. COVID has now become one of those factors.
If you currently have COVID and are applying for life insurance, you will more than likely be declined for coverage, for obvious reasons. However, after full COVID recovery, insurance companies will likely be willing to offer coverage, subject to a waiting period of 30-90 days. The good news is that once fully recovered, preferred rates will still be available for those meeting the normal guidelines. For those with lingering symptoms however, approval would depend on which specific symptoms were present, and the rate classification might be adversely affected.
All of this could change because the long-term effects of COVID are still unknown. Therefore, current underwriting guidelines are likely to evolve when more information becomes available.
Call The Dearborn Agency if you would like more information regarding this topic and insurance guidance.
