COVID Crisis Driving Interest in Life Insurance: A Primer for Clients

COVID Crisis Driving Interest in Life Insurance: A Primer for Clients

The Coronavirus pandemic has touched nearly everyone’s life.

Only those isolationist souls living well off-grid have escaped the turmoil, though we doubt their ‘avoid all contact’ lifestyle brings any satisfaction, while others are suffering. Here in ordinary society, we’re confronting challenges extending well beyond issues like finding painless dentistry in a forest wilderness. We sometimes wonder which party should feel the wiser.

Life insurance. In times like these – not unprecedented, if we consider the span of human history with its wars, plagues and natural disasters – the earnest stridency of insurance agents, annoying perhaps in ordinary days, suddenly seems prescient. We’ve endlessly warned customers to plan for the unforeseeable, because while death is assured, you never can tell when it will occur. By now, our point has been made to everyone.

For the uninsured, the COVID crisis has driven an urgent interest in life policies. Some online insurance brokers have recorded dramatic spikes in applications, particularly for instant-approval products. According to one spokesman, the reason is simple: people want to protect their families from the economic fallout of their untimely demise. We know it’s unpleasant, but the reality and the need to responsibly prepare for it, has rapidly sunk in with the uninsured public.

People with life insurance in place are likely feeling pretty good about it. They made a wise choice to protect their estate and family and it’s now paying off, if not in literal terms, then certainly in removing a crucial cause of anxiety.

A pandemic, replete with travel bans, economic dislocation and enforced lockdowns – we had to cancel a client consultation early in the crisis, because the National Guard had sealed off the New Jersey neighborhood where the meeting was scheduled – raises enough problems without worrying who will feed the family if the worst happens. For the insured, the policies are sound, the premiums fixed and the potential benefits locked in. We expect the COVID nightmare’s lessons will be passed down for generations – and hopefully, the message will get through.

If you don’t have a policy, this may be a particularly good time to buy. The price of insurance is driven by myriad factors, including interest rates, market fluctuations, general economic conditions and so on. For example, some industry observers fear that low interest rates, such as those seen today, could bring significant harm to insurers, while others say the danger is exaggerated. Whatever the case, the price of insurance for customers is now holding steady.

Allison Kade, head of organic growth at online insurer Fabric, has this to say: “If you’re a healthy young person and you’re applying for life insurance, your rates shouldn’t be changed” by the coronavirus crisis. Nothing has changed in the underwriting process over the last two months to drive a major rise in premiums, she says. The danger of a premium spike, if one should materialize, lies in the future, making today a very good time for the uninsured to get a policy.

Online providers, whose quick-and-easy offerings are particularly popular today, have an important warning for new life applicants: don’t obfuscate. The temptation to underplay risks and health conditions is always strong when applying for insurance. Agents habitually warn: honesty is the sole policy. Hidden risks always come to light and deception leads directly to policy cancellation.

For example, travel to destinations where the virus is widespread might be unavoidable for certain people, either for family or professional reasons. If this applies, don’t lie. If you do, it’s a case of fraud and the policy would be nullified, perhaps right when its proceeds were direly needed.

For more information, please read:
4 things to know about life insurance during a global health crisis | Business Insider

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