During this time of unprecedented uncertainty, all of us are concerned about the safety and well-being of our families. Life insurance may feel like most important investment decision you will ever make for you and your loved ones. We are often asked how does life insurance work and will it cover deaths caused by or related to COVID 19?
How Does Life Insurance work?
Life Insurance is a risk management tool, it provides you financial protection for outstanding debts / liabilities or people who actually depend on your income. You should have proper life insurance coverage in place to protect your loved ones from financial sufferings if you die unexpectedly and prematurely.
Does Life Insurance Cover Deaths related to COVID 19?
Answer is … YES ! Life Insurance covers COVID 19 related death so long as:
You honestly answered Insurance Application – Claim could be denied if you don’t disclose travel plans or you lied about pre-existing medical conditions in your insurance application. Hence, if you are applying for life insurance, make sure all questions are answered truthfully!
You paid due insurance premium on time – you must ensure that your due life insurance premiums are fully paid. Any missed payment could lead to lapsing insurance policy and if your policy lapses before you die, your beneficiary will be denied of claim.
You have bought right life insurance policy – Accidental Death & Dismemberment Insurance, also known as AD&D insurance, does not cover deaths caused by diseases or illness. You must ensure you have a standard life insurance policy that would cover death caused by COVID 19.
Can I buy Life Insurance now during pandemic?
You surely can apply for life insurance policy now, once approved, your coverage will start immediately. However, you must keep a few things in mind while applying for insurance
Waiting period may apply – If you recently have travelled internationally, insurance company may decide to postpone or delay approval. In addition, if you are having pre-existing medical conditions or are a candidate with high risk (e.g. old age, overweight, diabetic) you may be required to wait for up to 90 days.
Medical Exam – you may or may not require a medical exam depending on your age and health condition. Most insurance companies have updated eligibility criteria during pandemic and offering insurance to certain limits / age without medical exam. You could be eligible up to $1 million coverage without medical exam based on underwriting guidelines and declaration of health-related questions. You must explore this with your Insurance Advisor.
Truthful declaration in Insurance Application – you may be asked questions about travel, cruise, COVID symptoms related questions, you must answer these questions honestly. Claims could be denied if you were dishonest.
Choose a financially-sound insurance company – with so much challenges in the Economy, you must ensure that you chose an insurance company that has strong financial credentials and validated financial ratings. Take the advice of an Insurance Expert who would guide you through the process.
Finally, If you have been thinking of life insurance, are worried or have more concerns, feel free to reach us and our Insurance Experts would be happy to assist you identifying your needs and help you decide the coverage that would best suit your needs and budget. We shall empower you to navigate your financial future with great ease and confidence. Well, the best time to plan and buy your life insurance is NOW when health and age is on your side!
Written by Sunil Arora (Sunny) – MBA, RIBO, CAIB