Life Insurance Coverage and COVID-19: Does it Cover Coronavirus?
In light of the COVID-19 pandemic, life insurance may feel like an important investment now more than ever. But what exactly is life insurance… and can you sign up for it right now? We have the answers to your top COVID-19 questions here.
How Does Life Insurance Work?
Life insurance is a form of protection. With term life insurance, you pay a fixed monthly rate for a period of time (usually 10-30 years). If you pass away during that time, your family will receive a tax-free, cash payment. They can use this money to pay for expenses they’ll need to cover in your absence, such as funeral costs, medical bills, and existing debt.
Does Life Insurance Cover Deaths Caused By/Related to COVID-19?
The short answer? Yes! Life insurance covers COVID-19 related deaths as long as:
You were honest on your application. Life insurance companies can deny your claims if you don’t disclose travel plans or you lie about pre-existing medical conditions. If you are considering applying for life insurance right now, make sure you answer these questions truthfully!
You paid your premiums on time. It’s important to pay your monthly life insurance rates on time. Missed payments can make your policy lapse, and if your policy lapses before you die, your family will not receive a payout. Many insurers are giving people extra time to pay during this pandemic. If you’re not sure you can afford your plan right now, discuss the issue with your insurance company before skipping a payment.
You bought the right kind of policy. Accidental Death and Dismemberment (AD&D) insurance typically doesn’t cover deaths caused by illness or disease. You’ll want a standard life insurance policy if you’re worried about COVID-19 coverage.
Can I Sign up for Life Insurance Right Now?
Yes, you can currently apply for a life insurance policy. If you’re approved, your coverage will start immediately. A few things to keep in mind while you shop:
You may need to wait. If you’ve recently traveled internationally, your insurance company may wait 30 days before approving your policy. Additionally, if you’re a more at-risk candidate (e.g. you’re older, diabetic, or overweight), you may be required to wait 90 days before applying.
You may (or may not!) need a medical exam. Depending on your situation, a life insurance company can require you to get a medical exam before approving your application. Most companies are currently providing extra time to take your exam–a full 120 days–so you can honor local stay-at-home orders; if you have to wait for a medical exam, you may be eligible for temporary coverage in the meantime. Alternatively, you can look into companies like Bestow that don’t require any exam at all and offer instant application decisions.
You should answer application questions honestly. You may be asked if you’ve recently been on a cruise or tested/treated for COVID-19. If that’s the case, answer honestly! Saying yes to these questions doesn’t necessarily mean you won’t be approved. Plus, your claims can be denied in the future if you’re dishonest.
You should look for a financially-sound company. With so much upheaval in the economy, Forbes recommends buying life insurance from a company that has strong, third-party validated financial ratings (e.g. from A&M Best or Standard & Poor’s).
How Do I File a Life Insurance Claim?
If you’re the beneficiary of a life insurance policy, you’ll need to file a claim when the policyholder dies to receive any money. There is no time limit to filing a claim as long as the policy was active when your loved one passed away. This process involves a few steps:
Gather the right paperwork.
Death certificate: You will need certified copies of the death certificate to prove that your claim is legitimate. You can usually request this from the funeral director, or you can order it from your local health department.
Policy document: This document lists the life insurance policy details.
Request claim paperwork. You can reach out to the insurance company (or to the policyholder’s life insurance agent, if they had one) to get a “request for benefits” form. This is where you fill out information about your policy, the policyholder, and how you would like to be paid. You can generally choose between receiving the money all at once or being paid in installments.
Complete and send in the paperwork. Providing accurate information to the insurance company will make sure your request is processed without delay. Make sure you include the certified death certificate.
If you are interested in purchasing life insurance, you can request a quote from our partner, Bestow, here.
