The Covid-19 pandemic is a watershed event in most people’s lives – something uncanny, unexpected despite the warning signs of earlier outbreaks, an event few people were prepared to tackle.
Public policymakers reflexively call every difficulty, great and small, a challenge. We’re hearing this usually bland word continually today, but in view of the coronavirus outbreak, we can only admire its composed understatement.
Life insurance agents have long warned customers to plan for unforeseeable events – death itself is a given, but when it strikes is never fully predictable. The coronavirus crisis has helped many people to get the point, leading to a near-panic wave of life policy purchases. The circumstances may be regrettable, but at least people are facing the incontrovertible if unpleasant facts. Life insurance is not an option.
Online financial advisor and insurance broker Fabric reports a 50% spike in applications for its instant-approval life products over a roughly one-month period. The popularity of its online will preparation services has increased in tandem. Macabre statistics to some, but we rate this as a measure of rising good sense.
The base reason for Fabric’s unprecedented sales growth is simple enough: customers are actively searching for “ways to protect their families,” the company’s CEO says.
Online services, easily accessed in a lockdown without potentially dangerous travel or face-to-face meetings, now have an obvious appeal. LifeQuotes, another internet insurance provider, says its application rate has risen 29% since late January, around the time when the viral threat first entered the public’s consciousness. The threat’s implications apparently sank in quickly and people anxiously sought protection.
Some clients wonder if traditional life products are appropriate instruments for girding themselves against a viral crisis. According to Bob Bland, CEO of LifeQuotes, the answer is yes: “The modern life insurance policy covers death by any cause at any time in any place, except for suicide within the first two policy years,” he says. Some policies are unsuitable for viral protection. Accidental death and dismemberment products are appropriate for accident protection. These policies shield people in dangerous lines of work and help address the financial implications of a road accident, mishap in the home or street or indeed any fatal accident. They don’t offer help for death or incapacitation caused by disease, so their utility in addressing the coronavirus crisis is nil.
Customers who purchase guaranteed issue products, which don’t require a medical exam, should determine if they have a graded death benefit, which limits the payout level in the first two years the policy is held. Given the immediate threat of the outbreak, this sort of policy might not be the best alternative for those seeking life protection.
Traditional life policies are usually the best choice, but the inherent limitations of the application process make them suboptimal in a crisis. Simply put, the underwriting process takes a long time. The applications are extensive and contain numerous health questions. A medical exam is needed, which nowadays might be hard to schedule. Financial and health records need to be delivered and verified. In the current crisis, people don’t have time to wait.
The online process is easier, but offers no panacea. Young and healthy applicants can usually pass the screening of instant life insurance providers in 15 minutes or so. Anyone with an existing health condition will still need a medical exam, as will more senior applicants. Since many of today’s anxious customers are younger – the usual suspects when it comes to avoiding a life policy purchase – this accelerated underwriting offers a rapid and effective solution.
Despite any potential payout limitations, something is certainly better than nothing, and speed is the key. For anyone who is uninsured today, rapid action is vital.
For more information, please read:
Consumers Panic Shopping For Life Insurance In The Face Of Coronavirus | Forbes