As the coronavirus pandemic continues to threaten the health of people in almost every community on the planet, it's natural for more people to consider the relevance of life insurance in the current situation. Does coverage apply to a death caused by COVID-19? Has life insurance gotten more expensive? Should I apply for life insurance now?
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At ValuePenguin, we took a closer look at these common questions regarding life insurance and the coronavirus.
Does life insurance cover COVID-19?
Yes. Unless you already had COVID-19 or recently traveled to an area under a travel advisory and didn't disclose that when you applied, your policy will cover you if you pass away due to COVID-19. Life insurance companies cannot change the terms of coverage for active policies, so anyone who was covered remains covered.
Has COVID-19 made it harder to get a new life insurance policy?
If you've been infected with the coronavirus or have recently traveled to a region with a heavy outbreak, applying for life insurance could take longer and be much more expensive. More recently, some insurers have stopped selling policies to customers older than a certain age. Terms and rates may change as life insurance providers continue adjusting to the situation.
Will COVID-19 have an impact on life insurance requirements in the long term?
It's still too early to know for certain. Some recovered patients are said to have suffered lasting lung damage, but medical professionals will need more time to assess the true long-term impact of the coronavirus. If there are lasting consequences, life insurers may incorporate that information into their underwriting standards, which could affect the cost of coverage for COVID-19 survivors.
According to some researchers, it's also possible that COVID-19 could last beyond the current pandemic and join the established family of respiratory illnesses that we deal with every season. Depending on how quickly and effectively new treatments and vaccines are developed, the threat of a recurring COVID-19 season might mean higher costs in life insurance.
Does the current coronavirus pandemic make it more important to have life insurance?
We don't think that COVID-19 significantly changes the answer to whether you need a life insurance policy. Our recommendation has always been that life insurance is necessary for anyone whose death would result in financial strain for another person.
Anyone who provides care or financial support to their family members should have enough life insurance to replace that support for as long as it's needed. Married couples — even those without kids — can also use life insurance to ensure that each spouse can maintain their joint standard of living even if the other passes away.
If you aren't married and don't have any dependents, life insurance is probably not essential for you. However, consider that your situation may change in the near future. If you have a parent whom you expect to support in their old age or a significant other whom you plan to marry, those ties may justify obtaining coverage ahead of time.