Last updated: 21:16 / Wednesday, 25 March 2020
Column by Mary Oliva

COVID-19: Is Your Life Insurance Policy Inmune?

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The global pandemic COVID -19 has, in a few short weeks, altered our life as we knew it.  This is true for our younger population being homeschooled; for parents working from home; and especially for the many who have tested positive and are recovering or have lost their lives to this invisible enemy.

As we watch the hourly updates with great concern and borderline panic, current and potential life insurance policyholders all over the world, afraid for their own lives and the security of their families, are wondering—what impact could the outbreak of COVID-19 coronavirus have on my life insurance policy or am  I still eligible to  purchase a life insurance policy in the midst of this chaos?

Feel free to cheat and scroll down for the Top 3 Frequently Asked Question!

If You Already Have Life Insurance…

If you already have life insurance, you don’t need to worry about COVID-19 coronavirus affecting your existing life insurance policy. Having said that, you should be concerned about catching the virus or spreading it. Therefore,  by all means keep washing your hands and abide by expert advice about social distancing and restricted travel.

But in the universe of worries ushered in by COVID-19 coronavirus, including plummeting stocks, limited resources and an alarming economic outlook, threats to your life insurance policy can be crossed off of your worry list.

In the words of Ana Gomez, President of American Fidelity International Ltd:

“A life insurance policy is designed to offer us peace of mind and provide protection to our loved ones at the time of our death. Our life insurance product portfolio is designed to offer a death benefit to the designated beneficiaries in the policy, in the event of the insured's death, even if the death is caused by a virus such as Coronavirus (2019-nCoV).”

Global pandemics do not void your death benefit, even if you reside in, work in, or intend to travel to COVID-19 hotspots. Life insurance is underwritten prior to issuance. The terms and conditions of the policy are locked in and no subsequent event can alter them.

Although COVID-19 coronavirus is a reason to worry over your health, it is definitely not a reason to worry about the health of your life insurance policy. Even if the worst happens, your beneficiaries will be taken care of.

If You Are Considering Buying Life Insurance…

If you’re considering buying a new policy in the midst of the outbreak, both U.S. and international insurance companies are accepting new applications and you should be able to acquire a highly rated, competitively priced life insurance policy. As this situation evolves, however, it may become more challenging to be underwritten under the same terms within a reasonable time frame.  

As of now rates and conditions remain the same specifically in the term life space.  It is important to note that life insurance underwriters set policy terms based on a risk assessment. The factors that affect this risk assessment include your health, lifestyle, and age relative to the average life expectancy.

The COVID-19 pandemic has added uncertainty to the risk assessment equation, which insurance underwriters hate. Major insurers have already taken steps to reduce the number of coronavirus fatalities that end up as liabilities on their balance sheet.

Lincoln Financial Group (LNC) just announced a 30-day waiting period on applications submitted by applicants who have traveled into pandemic “hot” zones like China and Italy. American International Group (AIG) has similarly held all applications for recent hot-zone travelers until 30 days after their return from the US. Other companies have added a short COVID-19 coronavirus questionnaire to their application package.

Residents of Latin America or the U.S.A. considering the purchase of a new life insurance policy should not hesitate to contact their insurance advisors before the acceptance applications close off altogether.

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TOP 3 Frequently Asked Questions

Question #1: Does my life insurance policy cover death from a global pandemic like COVID-19 novel coronavirus?

Answer: Yes. No exclusions apply to global pandemics. Valid life insurance policies cover beneficiaries even in the event of the policy holder’s death in a global pandemic like COVID-19.

Question #2: I have not visited China, Europe  or other country  heavily impacted by the COVID-19 coronavirus pandemic. Can I still get life insurance?

Answer: Absolutely, but you should act quickly since other variables may impact the process of working

Question #3: Will the COVID-19 global pandemic undermine my insurer’s ability to pay out claims?

Answer: Not with a reputable insurer. Top-rated insurers earn such ratings by maintaining substantial liquidity and re-insurance, safeguarding their ability to pay their claims liabilities.

Column by Mary Oliva: www.maryoliva.com

About Mary Oliva

 Mary Oliva has over 20 years experience. She currently is President- International Wealth Protection at  Wealth Protection Advisory

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