With the number of COVID-19 deaths in the U.S. passing 700,000 and continuing to rise, many Americans are thinking about life insurance.
In the first half of this year, the total number of life insurance policies sold increased by 8%, compared with the first half of 2020. This is the highest policy sales growth recorded since 1983, according to LIMRA’s Second Quarter U.S. Individual Life Insurance Sales Survey.
It’s difficult to predict how far this trend will go, but it would not be too far off to assume more people have begun considering how their death will affect their loved ones.
Although more people may be interested in buying life insurance, their chances of obtaining coverage could be hindered by the thing that inspired it: COVID-19.
Currently, having contracted COVID-19 does not jeopardize applicants’ chance at getting a life insurance policy, nor does it directly affect their rates, but that leniency could change soon.
Medical Exams Are Coming
Life insurance premium rates and other aspects of coverage are determined based on an evaluation of the applicant’s health. Applicants with healthier lifestyles tend to find better coverage at budget-friendly rates. This is because the better an applicant’s health is, the less of an insurance risk they are presumed to be. To determine this, many life insurers require applicants to go through a medical examination. The steps have fluctuated over the years, but with the onslaught of the COVID-19 pandemic, insurers could go back to the old way of evaluating an applicant’s health.
Changes to the life insurance screening process could get complicated as insurers try to fully assess the health of COVID-19 survivors. For starters, questionnaires most likely will focus in greater detail on the applicant’s battle with COVID-19. This potentially could lead to the revival of traditional medical examinations for underwriting.
In recent years, insurance carriers have been able to qualify an applicant’s risk and price their policy through the use of artificial intelligence. Taking a virtual route with life insurance screening nearly replaced the need for a full medical examination. However, with COVID-19 being this great unknown for insurers and health care professionals alike, applicants could be required to take a traditional medical exam.
A big concern for insurers is what is known as “long-haul COVID-19.” Long-haul COVID-19 has affected millions of COVID-19 survivors and will continue to harm more as the pandemic draws on. Long-haul COVID-19 refers to instances where symptoms of the virus are present in a victim for months following the initial diagnosis. Some common characteristics of long-haul COVID-19 include headaches, fatigue, breathing problems and muscle aches. As you can imagine, having long-haul COVID-19 can greatly affect a person’s health even when they aren’t symptomatic.
This concerns insurance carriers. It’s possible that the screening process for life insurance applicants might include questions about whether an applicant had COVID-19 as well as what issues they have had following the infection.
COVID-19 can affect all areas of the body. When it comes time for evaluating a life insurance applicant, underwriters might take an added interest in the applicant’s organ health. COVID-19 has the potential to trigger certain conditions such as pneumonia and other respiratory problems that may permanently impact a patient’s breathing ability. Life insurance policies will need to reflect this new elevated risk.
The COVID-19 survivor’s immune system also will be a target of concern. The virus has the potential to inflict serious damage to the body’s immune system response. Without a strong immune system, other viruses can creep in post-recovery. Whether it’s another round of COVID-19 or something else just as harmful, those long-term effects can be disastrous to a person’s health.
Complications For Some Applicants
How all these concerns affect applicants can vary greatly. The severity of COVID-19 can vary drastically from case to case. COVID-19 first was believed to harm only older adults but eventually it was found that even the most physically fit people can fall to the virus. How life insurance companies will take the effects of COVID-19 into consideration could get a bit interesting.
If the applicant has been noted to be otherwise healthy outside their COVID-19 diagnosis, their chances of getting a life insurance policy likely will not be affected. Even if they had the most severe of cases, their health risk generally will be assumed to stay the same. Contracting the virus will be regarded as a sort of blemish that insurers assume will not lead to the patient’s health suddenly becoming jeopardized. But this does not mean COVID-19 will not be of interest to insurers.
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