How Is the Coronavirus Affecting Life Insurance?
As COVID-19 continues to threaten the health of people in almost every community on the planet, it's natural for more people to consider the relevance of life insurance in the current situation. Does coverage apply to a death caused by COVID-19? Has life insurance gotten more expensive? Should you apply for life insurance now?
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At ValuePenguin, we took a closer look at these common questions regarding life insurance and the coronavirus pandemic.
Does life insurance cover COVID-19?
Yes. Unless, when you applied, you didn't disclose that you'd had COVID-19 or recently traveled to an area under a travel advisory, your policy will cover you if you pass away due to COVID-19. Life insurance companies cannot change the terms of coverage for active policies, so anyone who had been covered remains covered.
Has COVID-19 made it harder to get a new life insurance policy?
If you've been infected with the coronavirus or recently traveled to a region with a heavy coronavirus outbreak, applying for life insurance could take longer and be much more expensive. Recently, some insurers have stopped selling policies to customers older than a certain age. Terms and rates may change as life insurance providers continue adjusting to the situation.
Will COVID-19 have a long-term impact on life insurance requirements?
It's still too early to know for certain the effects of the coronavirus pandemic in the long run. Some recovered patients are said to have suffered lasting lung damage, but medical professionals will need more time to assess the true long-term impact of COVID-19. If there are lasting consequences, life insurance providers may incorporate that information into their underwriting standards, which could affect the cost of coverage for COVID-19 survivors.
According to some researchers, it's also possible that COVID-19 could last beyond pandemic status and join the established family of respiratory illnesses that we deal with season after season. Depending on how quickly and effectively new treatments and vaccines are developed, the threat of continuously recurring COVID-19 might mean higher costs for life insurance.
Does the pandemic make it more important to have life insurance?
We don't think that COVID-19 significantly changes the answer to whether you need a life insurance policy. Our recommendation has always been that life insurance is a good consideration for anyone whose death would result in financial strain for another person.
Anyone who provides care or financial support to family should have enough life insurance to replace that support for as long as it's needed. Married couples — even those without kids — can also use life insurance to ensure that each spouse can maintain their joint standard of living if the other passes away.
If you aren't married and don't have any dependents, life insurance is probably not essential for you. However, consider that your situation may change in the future. If you have a parent whom you expect to support in their old age or a significant other whom you plan to marry, those ties may justify obtaining coverage ahead of time.