Our phones have been blowing up with questions from both clients and non-clients with questions about how Coronavirus affects their current policies and if they could get new policies. Here is a pretty comprehensive Q&A about it. If you have specific questions, do not hesitate to call us.
COVID-19 impact for life insurance policyholders
Q: Does my policy cover death from COVID-19 or a pandemic?
A: As long as you were honest on your application about preexisting conditions and plans for travel, Life Insurance covers death from COVID-19 or a pandemic overall.
Q: Does the two-year contestability period impact whether I’m covered from death by COVID-19?
A: First, some background: your life insurance policy is a contract between you and a life insurer. A two-year contestability period is a common clause across the industry that protects insurers from fraud or false information on applications within the first two years the coverage is in place.
Life insurance companies do pay claims during the two-year contestability period. That said, any claims made within the first two years of owning a policy will be more thoroughly reviewed to ensure application information was truthful and complete. If you honestly answered the questions in the life insurance application, then you have little reason to be concerned about whether or not a claim related to COVID-19 would be paid.
Q: If I contract COVID-19, can I utilize the accelerated death benefit rider?
A: Currently, the majority of COVID-19 cases are not fatal for younger, healthier individuals, which many of our customers are. And to access the accelerated death benefit rider, a policyholder must be terminally ill with a documented life expectancy of two years or less.
If a policyholder were to become terminally ill due to a severe infection from COVID-19, they can access 75 percent of their death benefit or up to $250,000, whichever is less. Please keep in mind that whatever funds are accessed will be subtracted from the overall life insurance policy payout made to beneficiaries. For example, if a policyowner has a $500,000 policy and accesses $100,000 of the funds using the accelerated death benefit provision, their beneficiaries would receive a payout of $400,000.
COVID-19 impact when applying for life insurance
Q: Can I still buy life insurance during the COVID-19 pandemic?
A: Yes, you can still apply for term life insurance and, if approved, get coverage started immediately. If you need to take a medical exam to finalize coverage (which you will be notified of when your application is submitted), please note there could be limitations in availability during this time. All applicants have 90 days to complete the medical exam, and in many cases, you will be able to have temporary coverage in place until you take the medical exam.
Q: Can I get coverage if I recently traveled to or plan to travel to China, Italy or other affected regions?
A: Underwriting guidelines as a result of COVID-19 are evolving. For individuals who are applying for our MassMutual-issued policies, there may be additional questions in the underwriting process about international travel and potential waiting periods for a decision as a result of travel to higher-risk countries.
Coverage eligibility for life insurance applicants with travel plans to State Department Level 3 or 4 countries (which currently includes China, Italy, South Korea and others) will be postponed and require a 30-day waiting period after they return to the U.S. Once the 30 days have passed, individuals may reapply. This waiting period and applicable countries may change as we learn more. Additionally, if you have recently returned from international travel with an illness or respiratory infection, then a decision on coverage eligibility would be postponed until after the 30-day waiting period.
If you would like specific questions answered regarding your travel plans and if there will be a waiting period, our customer success team is happy to assist.
Q: Are life insurance premiums going up as a precaution?
A: Life insurance rates are not increasing as a result of the evolving COVID-19 situation. Please keep in mind that if an applicant contracts an illness, then that could increase the cost of the premium or make an applicant ineligible for coverage.
Q: Can I still get instant, no medical exam life insurance coverage?
A: You might have guessed we’d say this, but: the answer to this may evolve over time, too.
Currently, eligible applicants may either qualify for no medical exam experience or may be able to get temporary coverage in place while they complete a medical exam and await the results. Due to the need for additional caution surrounding international travel, you may need to answer some questions from an underwriter about future plans before receiving an offer. Keep in mind that it’s important to be honest in the application process. The issuance of the policy or payment of benefits may depend upon the truthfulness of answers provided in the application process.
Whether some follow up questions or a medical exam are needed, we work very hard to make dependable buying term life insurance as simple as possible. Once an application is submitted, which takes about 15 minutes, you will be notified of whether you are approved for coverage or if more information is needed.
Q: How does two-year contestability work if I contract COVID-19 in the near future?
A: This provision in your life insurance contract protects the company from fraud or false application information. Life insurance companies do pay claims during the two-year contestability period. That said, any claims made within the first two years of owning a policy will be more thoroughly reviewed to ensure application information was truthful and complete. As long as you reported honest information on your life insurance application, including sharing health conditions or international travel plans, then you have little reason to be concerned about if a claim related to COVID-19 would be paid.
Q: Are you still performing life insurance medical exams?
A: In most states, applicants are still able to schedule the medical exam to be performed at a location of their choosing. The third-party exam administrator we use, ExamOne, has rigorous safety procedures in place to protect patients and employees from coming in contact with infectious diseases.
Prior to scheduling, ExamOne is now proactively asking applicants about fever or respiratory illnesses as well as recent travel to ensure the health of its examiners. If an applicant is currently experiencing an illness or was recently in a State Department Level 3 or 4 country, the medical exam will be postponed for 14 days.
For the health of paramed examiners, please do not schedule a medical exam if you are sick or if the location where you plan to take the exam may be contaminated.
Q: If I don’t feel comfortable taking a medical exam at this time, can I take it at a later date?
A: The third-party exam administrator we work with, ExamOne, takes the proper precautions to protect life insurance applicants and employees from coming in contact with infectious diseases. In light of the COVID-19 public health emergency, ExamOne has taken additional measures to bolster preparedness. These precautions include frequent disinfecting of all surfaces, frequent hand washing, and creating a special response team along with special training for employees.
Especially in uncertain times like these, we want customers and medical examiners to feel comfortable and remain healthy. All applicants now have 90 days to take the medical exam, so if an individual doesn’t feel comfortable taking the exam or if there are limitations in exam availability, there will be adequate time to take the exam at a later date. For applicants who are nearing the end of the allotted time for the exam, please contact customer success to see if we can provide an extension.
Q: If I’m sick should I take a medical exam?
A: Generally, if you are experiencing any type of illness or infection, it’s advisable to postpone taking the life insurance medical exam until you feel better. Being under the weather can skew the results of your medical exam, which would not present the underwriting team with an accurate depiction of your health.
If you have any concerns that you might be sick or experiencing symptoms like a sore throat, cough, or shortness of breath that are commonly associated with this virus, please contact a medical professional immediately and do not schedule a medical exam.
If you have any questions about getting a new life insurance policy or would like a free review and explination of benifits and riders from your existing life insurance policy, please contact Hoffman Insurance Group at 754-210-5366 or email us at info@higplanning.com
***Originally posted by Haven Life: https://havenlife.com/blog/life-insurance-and-coronavirus-covid-19/