Covid 19 and Life Insurance
The COVID-19 pandemic has had a profound effect on us all.
Even if it hasn’t touched you and your loved ones personally, it’s made us all more aware of how medically vulnerable we are.
Our financial vulnerability has been brought to our attention.
Life changes quickly, and you might be thinking of having more financial protection in place.
Here’s what you need to know about COVID-19 and life insurance.
Life Insurance Basics
Life insurance pays out a lump sum to your family or other dependents if you pass away during the term (length) of the policy. It offers peace of mind that your loved ones would be financially protected if you were no longer around to provide for them.
The funds received can be used by your dependents however they wish, but most often the money is used to clear the mortgage and other outstanding debts, cover living costs and fund childcare.
Life insurance premiums can start from as little as $10 a month, but the exact price you pay will depend on factors such as your age, health and lifestyle, occupation, and the type of coverage you take out.
Effect of COVID-19 on life insurance
While coronavirus has had a huge impact on the insurance industry as a whole, the life insurance sector has been left relatively unscathed. There has been no evidence of life insurers pulling out of the market, premiums have remained steady and COVID-related claims are already being paid, according to Brent Heurter, CEO of Healthy Halo.
Life insurance is still readily available to buy and – whether new or existing – policies will cover coronavirus.
And, while applying for life insurance often could take longer at the start of the pandemic as insurers updated their underwriting processes, these issues have been largely resolved and application times have improved.
One change is the introduction of COVID-19-specific questions on SOME life insurance application forms.
“Insurers are of course asking a few more questions and underwriting has tightened in some areas, especially for those with diabetes, asthma or who might be overweight,” says Heurter
Can I still get life insurance with a pre-existing condition?
The short answer is yes, but it will depend on the type and severity of the condition – and many insurers have become more selective about who they accept.
If your condition puts you at greater risk from COVID-19 – such as asthma and diabetes – or you're aged over 50, you may find it harder to get life insurance coverage, while those insurers that do offer cover are likely to charge higher premiums.
If your condition is a particularly high risk, the insurer may ask for more medical information or request a report from your GP. You may also need to have a medical examination. These usually only last around 20 to 30 minutes and involve answering some questions about your health and lifestyle, as well as having your height, weight and blood pressure checked, and having a blood sample taken.
If you’re concerned you won’t be able to find cover, it’s worth speaking to an independent broker here at Healthy Halo, whose experts will discuss your options and help find you the most appropriate coverage.
Are life insurers still paying out?
Although many consumers have struggled to claim on policies such as travel and wedding insurance as a result of the pandemic, no similar issues have been reported in the life insurance industry.
What about critical illness coverage?
The average heart attack costs over $100,000 in medical expenses. Don't let an unexpected illness set you back.
There is a direct correlation between COVID-19 and the shocking rise of heart failure and strokes.
Get a substantial tax-free lump sum payment if you’re ever diagnosed with heart attack, stroke, cancer, etc.
These medical emergencies or illnesses cost far more than average medical costs.
In the United States alone, over 60 percent of all bankruptcies are due to medical issues over that over 75% of all bankruptcies in 2008 that was due to medical problems had health insurance at the beginning of the illness.
While health insurance covers the cost of medical care, who is going to cover the additional expenses you incur from a serious illness that requires a long recovery period? With critical illness insurance, you can best supplement your health insurance with lump-sum payments that pay you directly upon diagnosis or treatment to assist in covering the increased expenses incurred.
With critical illness insurance, you manage more of the expenses you naturally incur if you are diagnosed with a covered procedure or illness. Covered conditions include:
Heart Attack / Bypass
These lump-sum payments help offset the standard costs during long-term recovery like:
Deductibles and copays
Day to day living expenses like mortgage paymanrs, vehicle payments, or other costs associated with everyday living
Any medical expenses not covered by health insurance
Personal or childcare costs during recovery
transportation to follow-up visits