Get the Answers to the Most Commonly Asked Insurance Questions During the Coronavirus Outbreak.
The world is in a state of crisis right now and uncertainty abounds. When will the coronavirus outbreak end? Will I get sick? How long will we have to stay home for?
Unfortunately, worrying about these things won't do you any good. Getting concrete answers so that your worries can be allayed is the best solution. While we don't have the answers to everything, we do have answers to all your questions about life insurance and disability insurance during the coronavirus outbreak.
Here are 8 of the most common insurance questions being asked during the coronavirus outbreak.
Do you need life insurance if you have a will?
A will and life insurance are two entirely different things, and both are necessary if you want your loved ones to have a smooth and easy time taking care of technical things after your death. A will is a legal document that includes instructions for distributing the assets in your estate. The death benefit from a life insurance policy is not considered to be part of your estate, since it's only payable on death. Upon death, it goes directly to the beneficiaries named in your policy.
A will does NOT supersede a life insurance policy. This means that if you name your children as the inheritors of your estate, but your partner is listed as the life insurance beneficiary, your children will NOT get that payout.
Can you get life insurance if you are unemployed?
Even before coronavirus, it was hard to get life insurance if you were unemployed. Nothing much has changed now, except that there are more people who are unemployed due to corona. The reason life insurance companies frown upon these applications is because there is no guarantee that unemployed people will be able to make their monthly premium payments. This is especially true for applicants who have been unemployed for a long time. If someone is temporarily unemployed because of coronavirus, companies might be more sympathetic. In short, it's not impossible to get life insurance while unemployed, but it's not easy. Your chances are better if you apply for term life insurance as opposed to whole, because term usually has lower premiums.
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Does the stock market influence your life insurance?
The short answer is yes and no. The long answer is that it depends on what kind of life insurance you have. If you have term life insurance, the stock market will not affect your premiums. The cost of your policy stays the same regardless of market fluctuations. Permanent life insurance, on the other hand, can be affected by the stock market, since they often work partly as an investment or savings plan and may have access to dividends which are often affected by the overall markets. Practically, speaking, this means that permanent life insurance policy-holders can see some changes, but they will need to contact their individual insurance carriers to see how significant the changes are.
Does disability insurance cover COVID-19?
Short-term disability insurance does cover COVID-19, but long-term disability most probably will not. Short-term disability insurance should cover COVID-19 and coronavirus-related illnesses if they render you unable to work. Your claim will need to be verified by a medical professional in order to be approved. Similarly, you can qualify for short-term disability benefits if you are in a medical self-quarantine related to coronavirus. This is NOT a social quarantine, during which people stay at home in order to prevent themselves from contracting the virus. A medical quarantine means you already have a medical condition that prevents you from going to work. Long-term disability insurance benefits are usuallycan only be applied for if you can't work for 90 days or more, which means that it won't be much of a help to people who test positive for corona or who are ill from it. (The virus typically lasts 14 days in the human body.)
Can you apply for disability insurance if you've contracted COVID-19?
No. If you've already contracted COVID-19 (or any illness), you cannot apply for disability insurance to cover that illness. That's why it's important to apply for disability coverage when you are healthy.
Will the life insurance application process, prices, and underwriting stay the same?
Unfortunately, the process is already changing, albeit slowly. Life insurance companies don't like risk, and now, risk is all around them. COVID-19 is a previously-unknown disease, so underwriters can't refer to their neat little lists of statistics to assess the risks of those who have it. In practice, this means that there are a few changes to the life insurance application process. First, obtaining medical records from doctors is now taking even longer than it usually does. This is problematic for applicants who need their records in order to get approval, which is why many insurance companies are pointing applicants to no-exam life insurance policies, which can be obtained without medical records or a medical exam. Additionally, while insurance applications have always asked about international travel, now there is a real fear of people who have recently traveled or who plan to travel in the near future. Many life insurance companies are delaying the applications of people who fit these criteria. Another difference in the application process is that many life insurance companies are adding specific questions on the application about whether the person had/has COVID-19 or has come into contact with someone who has it. Life insurance companies can deny an application if the person has coronavirus. At this point, it's unclear exactly how premiums will be affected by all the new circumstances.
Will travel history affect premiums?
At this point, premiums have not been affected by travel history, but approval of new applications is being affected. Many applicants who have traveled globally are having their applications postponed by life insurance carriers and being told to apply in a few months.
Does life insurance cover coronavirus?
If your life insurance policy was purchased before the coronavirus outbreak, it should cover coronavirus. However, there are several reasons why a death benefit would not be paid out, which are not unique to coronavirus but to any situation. An insurance company can refuse to pay out the death benefit if it finds that the person lied on the application, did not submit a complete application, or did not pay the life insurance premiums. Additionally, people who only purchased an accidental death policy will not be covered for coronavirus.
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