What if a client living in an area hit hard by the coronavirus called you up, asking if they could purchase more life insurance—and if they could count on the company to pay out should they get sick?
A dozen underwriters at various insurance companies were polled, and here is what they said.
First, the client’s profile:
45 years old
no medications or health concerns
does NOT currently have coronavirus
The overall feedback was that most could insure him as long as he has not tested positive for coronavirus. Most said if he did test positive, they would postpone offering him any coverage for 2-3 months post-recovery. Most also said they would not offer coverage if he had any plans to travel outside of the U.S. in the coming months.
Here are several of the responses received from the insurance companies.
“We can consider from San Francisco at this time. Please note that this could change very quickly as the situation is continually changing.
For coronavirus, if someone tests positive, or tested positive within 30 days, we are a postpone. However, once the condition resolves and it has been at least 30 days since diagnosis, we would consider not rated as long as medical records confirm resolution.
We are underwriting as usual.
We can still consider this individual at this time as long as he is not symptomatic.
Currently, we will not consider any plans to travel outside of the USA until after June 1st.
If he does not and has not had the coronavirus, we would take his application. The only current guideline changes we have made is regarding foreign travel to China, Hong Kong, Italy and Korea so if no travel involved and no virus history, then would be no change to the underwriting guidelines.
No restrictions at this time based on state of residence, but that could change at any time.”
Crucial point: all the companies interviewed were willing to consider this potential client. None said they were shutting their doors to certain parts of the country or putting new business on hold. Still, it’s important to understand that things can change fast. If you’re in the market for a life insurance policy at the moment, here are three key takeaways from the experience of shopping for the client above.
1. If you qualify for one, buy a no-exam life insurance policy
As the name implies, with a no-exam life insurance policy, you are not required to undergo a physical exam to qualify for coverage. What’s more—you can apply online and usually get approved next day.
Why is this hyper-relevant now? Because you don’t want to be meeting with a nurse for a physical; you may not be able to, in any case, due to stay-at-home restrictions. Also, if you have not been diagnosed with coronavirus, you have the chance to get coverage right now, before you potentially get the virus. We must understand that there appears to be a real possibility of this happening for all of us.
No-exam policies typically have lower maximum-coverage amounts, such as $500,000 or $1 million, and tend to cost more than full-physical policies. Still, a no-exam policy is a good idea as the first thing to do, regardless of cost or death benefit amount; once you have it, you can shop around for a better deal from another company. At the moment, it’s simply too risky to go through full underwriting unless you absolutely have to.
One choice for no-exam life insurance is Haven Life. Besides providing quick no-exam coverage, Haven is owned by Mass Mutual—in business since 1851, and rated A++ (Superior) by A.M. Best. In other words, you can be reasonably sure that they will pay their claims.
2. Use an Independent online agency if a no-exam policy is not readily available
There are a few reasons you may not be able to buy no-exam life insurance. Number one: you may simply be too old. Most no exam providers only offer this type of policy up to a maximum age of 59. Number two: as this pandemic progresses, some companies might simply stop offering life insurance products.
In either case, speak to an independent agency like, say, Policygenius or Health IQ. Both are online and have both exam and no exam options. What’s important is that they are independent, which effectively means that they represent multiple providers. Should you live in a highly infected area, some companies may continue to offer coverage while others may start pausing new applications. The advantage of an independent agency is that it will likely be able to direct you to a company that is still accepting applications.
One option for an online life insurance agency is Policygenius.
3. Do it now (if it helps, imagine Arnold Schwarzenegger saying this to you in no uncertain terms)
If you need life insurance, move fast. Insurance companies are still taking applications without considering location. If the virus continues to spread, they could pause new business in certain areas. If you wait, you run the risk of getting the virus, which could be both life-threatening and a no-no for getting life insurance for at least two months after making a full recovery.
This is why it’s important to get a no-exam policy now.
For more information, please read: I Asked 12 Life Insurance Companies About Coverage During the Coronavirus Crisis. Here’s What They Said | Money.com