With the pandemic all around us, people are starting to look seriously at life insurance to protect themselves and their families. As a matter of fact, a survey conducted in May and June 2020 by Life Happens, an industry funded education group, found that 67% of Americans say that the virus has been a wake-up call for them and 30% say that life insurance has been one of the topics for dinner table discussion.
Luckily, there’s never a bad time to make a financial plan and lock in coverage. Life insurance companies and agencies, like Surf Financial, quickly implemented plans to work around the hurdles of the pandemic. For instance, many of our carriers already had systems in place for agents to use web based application systems, but with some extra enhancements we can now have policies delivered to the clients directly instead of coming to our offices.
Now is a great time to buy life insurance because some companies have started raising prices. Before those increases kick in across the board, you may want to lock in on a great rate. It’s also a prime time to make an application that won’t require a medical exam. In the past, buying a no-exam policy usually meant paying more because the insurer had less information on you to assess their “risk” in selling you a policy. But the pandemic has made in-person meetings impractical, as well as unwelcome, so having a nurse do a paramed exam may no longer be necessary.
Even before the pandemic, many insurers had been working on ways to use data (such as electronic health records and prescription databases) as a substitute for medical exams and to digitalize the life insurance buying experience. Many life insurers quickly adapted by offering no-exam policies at prices comparable to policies that required an exam. This is giving life insurance buyers more choices for coverage—without worrying about how to get an in-person exam done.
Note: You may still run into a medical exam requirement if you’re looking for a large amount of coverage (in the millions) or you’re older or have health issues.
Some life insurance buyers will purchase the maximum coverage they can get without an exam, even if they need more. For whatever reasons, whether for convenience or because they have a fear of needles.
Whether life insurers will continue to offer no-exam policies after the pandemic remains to be seen. Exams could make a comeback if insurers see higher claims than they expected on policies that didn’t require a medical exams. If that happens, you could either see rate increases or the companies will start requiring exams again.
Another school of thought is that carriers won't go back to the old ways. Part of this is because of innovations that were already starting before Covid.
The unexpected closing of one of the three primary providers of life insurance medical exams also caused disruption. In early July, EMSI suddenly shut down and insurers had to scramble to get their applicants rescheduled with other exam providers. (The other two large providers are ExamOne and APPS-Portamedic.)
A typical life insurance application includes dozens of questions about your health, prescriptions, family health history, driving record and dangerous activities such as sky-diving. Since the application process is all about the insurer “assessing risk,” questions concerning the virus have quickly became a standard part of applications.
If you answer "yes" to questions like "Have you been diagnosed with Covid?" or "Has someone in your household been diagnosed with Covid-19?" you may not have your policy issued or it may be postponed. And if you have had the virus and have recovered, you may still have some difficulty getting a policy, mainly because not enough is known yet about the virus.
Insurance companies have always been concerned when it came to international travel. When the pandemic started, traveling internationally was seen as especially risky from a life insurance buying perspective. Most life insurance companies instituted postponements for applications until after the travel. Once you were back and healthy, and after a certain period of time such as 30 days, the insurer would consider your application. If you have plans for international travel this year, expect a delay on a new life insurance policy for at least 30 days. And that’s assuming you don’t have additional international travel plans.
If you’re ready to buy coverage, life insurance companies are fully open for business, but be prepared for potential delays due to the pandemic: You may experience a delay in the application process if your insurer wants to request medical records, as many doctors’ offices have reduced staff for doing such tasks. If your application will require a medical exam, you might also experience a delay, especially if you’re avoiding in-person contact with strangers.
Take time to look at how much life insurance you need. Applying now is easier than ever. For instance, we have added our calendar to our website, so you can schedule a time for one of our agents to call you to find out which plan you need and how to fit it into your budget.
Chris Castanes is the president of Surf Financial Brokers, helping people find affordable life and disability insurance coverage. He's also is a professional speaker helping sales people be more productive and efficient and has spoken to professional and civic organizations throughout the Southeast. And please subscribe to this blog!
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