Should the New Coronavirus Change the Way You Think About Life Insurance?

By March 13, 2020 No Comments

What You Should Know About Coronaviruses

Coronaviruses are a large family of viruses that are common in people and many different species of animals, including camels, cattle, cats, and bats. Rarely, animal coronaviruses can infect people and then spread between people. The new SARS-CoV-2 virus (the coronavirus which causes the disease COVID-19) is a betacoronavirus, similar to MERS and SARS. All three of these viruses have their origins in bats, according to the CDC. More information about SARS-CoV-2 and COVID-19 can be found at the CDC website.

As the number of confirmed cases and deaths continue to rise, health officials are working on all fronts to learn more about the virus and put measures into place to curtail its spread. Doctors have stated that washing your hands frequently is the best way to avoid getting sick.

The Coronavirus and Life Insurance

COVID-19: What Life Insurance Applicants Need to Know

Swiss Re, one of the world’s leading providers of reinsurance, is continuously monitoring the coronavirus situation. They suggest that insurance companies heavily lean on the current travel notices from the CDC (Centers for Disease Control and Prevention) if applicants have plans to travel internationally.

As an applicant, traveling to destinations on the CDC’s list restricted list can impact the life insurance application process. The CDC currently lists China, Italy, Iran, and South Korea as level 3 travel warnings, meaning that individuals should avoid any nonessential traveling to these places. Translation: if a life insurance applicant has plans to travel to a level 3 warning area, don’t be surprised if the life insurance company opts to post-pone coverage approval until some time has passed after you arrive back in the United States.

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COVID-19: What Existing Policy Holders Need to Know

Once placed inforce, a life insurance policy will pay out for most types of death, including anything related to complications from COVID-19 or any other disease. The rare occasions that the life insurance policy would not pay out would be if the cause of death was suicide within the first two years of the policy being active, if you died while committing a serious crime, or if the policy includes a clause excluding a specific cause of death. For example, if you’re a racecar driver, you may opt for less expensive life insurance policy that excludes coverage for death as a result of racing.

For current life insurance policy holders, if you are diagnosed with coronavirus, your coverage will remain active. Once you buy life insurance, as long as you keep paying the premiums your coverage will stand.

Life Insurance for You and Your Family

Life insurance financially protects loved ones. If you die and have life insurance coverage, your beneficiaries receive a death benefit. This benefit won’t protect them from the pain they feel because of your death, but it can provide monetary assistance. Not needing to worry about how to pay the utility bill can only assist your family as they grieve.

Your beneficiaries can use the life insurance death benefit however they wish. The funds can be used to pay for many things such as:

  • Your funeral and burial,
  • Medical bills,
  • Mortgage payments,
  • Child’s education,
  • Child’s wedding.

There are various types of life insurance. Permanent life insurance lasts your entire life but has expensive premiums. Term life insurance is the best option for most people. Term life insurance is affordable and can fit into most budgets. You choose the coverage amount and how long it lasts.

Term life insurance provides temporary coverage for a fixed price. For example, a healthy 30-year-old male can buy $500,000 in life insurance coverage that will insure him for 20 years for $20 per month. During these 20 years, the $20 per month will never change. Even if this young man gets diagnosed with the coronavirus, the life insurance coverage remains in place and the premiums will not increase.

When buying a term life insurance policy, there is an option to add on what is called a child rider. If you have children, this is an important rider to consider.

For a nominal annual fee, typically $50 annually for $10,000 in life insurance coverage, your children can be insured when you get insured. One child rider covers all of your children.

The death of a child is the worst possible situation one could think of. No parent deserves it. A child rider doesn’t bring emotional comfort, but it provides a small amount of money to pay for a funeral and burial.

A child rider is especially important to families with more than one child. The funds provided by the rider allows parents to focus on being there to support their other children versus worrying about how to pay for a funeral.

For parents with children who have a disability or special needs, a child rider can be beneficial in more than one way. A child rider comes with the option to later on convert the rider into a permanent life insurance policy. A life insurance policy this child would otherwise not qualify for.

In similar fashion, this rider can convert to a permanent policy for a child who becomes uninsurable. Perhaps the child later develops a serious medical condition or finds themselves in legal trouble. When converting a child rider to a permanent life insurance policy, the life insurance company does not evaluate the child’s current health or lifestyle situation. The child rider provides guaranteed insurability.

Purchasing life insurance is still the best way to protect your loved ones, regardless of what the future holds. Just as no one could have predicted the outbreak of COVID-19, no one can truly predict how much time they have left on Earth. The good news is: Quotacy is your advocate and can help you find & buy affordable life insurance today.

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