Life Insurance And Pandemics: What's Covered?

The COVID-19 pandemic has affected many industries, and life insurance is no exception. Life insurance policies typically cover deaths due to illness, including pandemic viruses like COVID-19, but there may be exceptions depending on the company and the policy. Some companies may postpone coverage for applicants who test positive for COVID-19 or display symptoms until they recover. Additionally, certain policies with dread disease riders may not provide benefits unless they specifically include viral illnesses. The pandemic has also made it more challenging to obtain high-value policies, especially for those who have recently recovered from COVID-19, as insurers have tightened underwriting norms. Overall, while life insurance generally covers pandemic-related deaths, it's important to carefully review the specific terms and conditions of your policy to avoid any unexpected exclusions.

Life insurance policies cover deaths due to illness, including pandemics

In the case of new applicants, if an individual is experiencing COVID-19 symptoms or tests positive, their coverage will be postponed until they test negative. However, if an applicant is asymptomatic and tests negative, they can apply for coverage as usual, and if they contract the virus later, they will be covered.

It is important to note that life insurance companies do not consider vaccination status when deciding on claims, and COVID-19 vaccination is not a reason for benefit denial. Life insurance companies have also extended their payment grace periods to accommodate financial difficulties during the pandemic.

Overall, life insurance policies typically cover deaths due to pandemics, but it is always a good idea to carefully review your specific policy for any exclusions or special considerations.

Policyholders who die from COVID-19 will be covered

If you have a life insurance policy, you will be covered if you die from COVID-19. This is true as long as your policy is in good standing and your premiums are current. Life insurance policies will usually cover deaths due to illness, including pandemic viruses like coronavirus and COVID-19.

However, dread disease riders on life insurance policies only cover the conditions they specify, so unless a viral disease like COVID-19 is listed, the rider is unlikely to provide benefits. If you are looking to buy a new life insurance policy during the pandemic, you may be asked specific pandemic-related questions about your health and travel history.

If you have a life insurance policy and you die from COVID-19, your beneficiaries will receive the policy's death benefit. The process for filing a claim against your life insurance policy in the event of death is as follows:

• Contact your insurance agent (or insurer directly), who will be able to guide you through the whole process.
• Obtain an official copy of the death certificate and also a certified copy from the funeral director (or other official authority).
• Contact your insurance company to initiate a claim on the policy.
• Submit the death certificate to the insurance company to substantiate the claim and proof of death.

Upon satisfactory proof, the insurance company will provide the death benefit to the beneficiary.

Life insurance claims are rarely denied

Reasons for denial of life insurance claims

Inaccurate or incomplete application

Claims can be denied if you didn't disclose certain information on your application, such as high-risk travel plans, or your true weight or income. Lying about any COVID-related illnesses, if asked, can also lead to denial of a claim. Therefore, it is important to be truthful and ask questions when filling out an application.

Missed premium payments

If your policy lapses due to non-payment of premiums and you die, your beneficiary will usually not receive a payout. Life insurance companies often offer a grace period, typically 30 days, during which you can continue your coverage by paying the insurer. In some cases, you may be able to reinstate your policy if it lapses, but this may require providing updated information about your health.

Accidental death policies

Accidental death and dismemberment insurance (AD&D) is designed to cover accidents and does not pay out if the insured dies of illness or injury. Sometimes, AD&D coverage is added to a standard life insurance policy as a rider, in which case the underlying traditional policy would still pay out for a death from COVID-19.

Life insurance and COVID-19

The COVID-19 pandemic has led many people to consider their mortality and the importance of having life insurance to protect their loved ones financially. While the application process for life insurance policies has changed during the pandemic, with some insurers temporarily suspending applications or adjusting their coverage options, it is still possible to obtain coverage.

In most cases, life insurance policies will cover deaths due to COVID-19, as long as the policy is in good standing and premiums are up to date. However, there may be exceptions, such as in the case of a "contestability period" or if the policy includes an accidental death rider.

During the pandemic, misinformation circulated claiming that life insurance claims would be denied for people who had received a COVID-19 vaccine. However, this is false, and your vaccination status does not impact the payout of your death benefit or your eligibility for a new policy.

It is still possible to buy a new life insurance policy during a pandemic

The COVID-19 pandemic has affected many industries, including the insurance industry. If you are looking to buy a new life insurance policy during a pandemic, here are some things you should know.

Firstly, it is still possible to purchase a new life insurance policy during a pandemic, although the application process may differ from the usual procedure. For example, due to social distancing rules, insurers may waive any medical exam requirements, instead accepting medical records from a recent doctor's visit or extending the deadline for taking the medical exam.

Secondly, you should be prepared to answer additional pandemic-related questions about your health and travel history. These may include whether you have had, been treated for, or been vaccinated against COVID-19, and whether you have travelled to any high-risk countries or areas. Insurers may also implement waiting periods for international travellers due to the uncertainty of the illness and the many health advisories warning against travelling abroad. If you currently have the coronavirus, most insurers will not issue a new life insurance policy until you can prove that you have recovered.

Thirdly, when choosing an insurance company, it is important to look for financial strength and stability. A financially strong company ensures that your policy is set for many years, giving you peace of mind that they will not fold or declare bankruptcy. You can find rankings of insurance companies based on their assets, net worth, and net income on the website of the Insurance Commission.

Finally, due to the pandemic, you can expect no-contact meetings and policy delivery. Financial advisors can offer advice via video calls or phone, and documents can be signed electronically and sent by email.

In conclusion, while there may be some changes to the usual process, it is still possible to buy a new life insurance policy during a pandemic.

Life insurance companies have turned cautious and tightened underwriting norms for high-value policies in the wake of the COVID pandemic

The COVID-19 pandemic has had a significant impact on the insurance industry, with life insurance companies becoming more cautious and tightening their underwriting norms for high-value policies. This shift is particularly evident in the case of individuals who have recently recovered from COVID-19, as insurers now require further screening for this group.

Previously, a 35-year-old individual could obtain a Rs 1-crore term cover after a simple telemedical check-up. Now, if that same person had a history of COVID-19, they would be subject to more extensive testing and evaluation. This increased scrutiny also applies to other aspects of the applicant's profile, such as their profession, medical history, place of residence, background, and access to healthcare for post-COVID recovery.

The pandemic has also led to a pullback by reinsurance companies, citing low rates in India, which has further contributed to the cautious approach adopted by life insurance providers. As a result, obtaining high-value life insurance coverage has become more challenging and, in some cases, more expensive.

This trend is not unique to India, as similar patterns have emerged in other parts of the world. For instance, in the United States, the pandemic has resulted in a hard insurance market, with rising premiums and decreasing capacity. The property and casualty insurance sectors have been particularly affected, with companies like Chubb reporting significant losses and combined ratios approaching 100%.

The impact of the pandemic on the insurance industry is expected to persist, with profitability remaining a challenge for insurers throughout 2021 and beyond. As a result, insured individuals can anticipate continued pressure on rates and possible reductions in coverage across multiple lines.

While the focus here is on high-value policies, it is worth noting that the pandemic has also raised interest in life insurance coverage among consumers. Many people have re-evaluated their financial priorities and recognised the importance of having adequate protection for themselves and their families. This shift in consumer behaviour presents an opportunity for insurers to demonstrate their value and build stronger relationships with their customers.

Frequently asked questions