Has COVID Led to an Increase in Life Insurance Policies?

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The COVID-19 pandemic has altered the shape of American life in unprecedented ways. At the time of this writing, there are over 33 million cases of COVID in the United States, with over 600,000 deaths and deaths per day numbering in the hundreds. In the face of such staggering mortality statistics, it should come as no surprise that the pandemic has also changed the life insurance industry, and the way many people look at life insurance in the first place. 

Why has COVID spurred people to take out life insurance?

COVID-19 has affected American life in a countless number of ways, from the increased popularity of working from home to the drop in college enrollment rates as people, particularly young people, put their futures on hold — except, perhaps, when it comes to choosing a life insurance policy.

In particular, people as young as their 20s and 30s have begun thinking about their mortality in ways they might not have in less complicated times. They worry about what might happen to family members after they’re gone, or if they became too sick to work.

As such, the life insurance industry has seen a double-digit surge in searches for life insurance and queries about purchasing a life insurance policy. Much of this amounts to “panic buying,” as the initial lockdown, combined with mass layoffs and a mounting death toll, left millions worried about their financial future.

Term vs. Universal Policies

The pandemic has also affected which life insurance policies have seen an increase in sales. In particular, there has been a major increase in term life insurance, which is a policy set for 10, 20, or 30 years, rather than a permanent policy such as “whole” or “universal” life insurance policies?

Term policies have grown more popular since COVID-19 in particular because they tend to be the simplest, least expensive policies available, which is particularly important during tough financial times. Experts say term insurance has also become more popular due to the perception that the policy will only be needed until the pandemic subsides or is over.

Has COVID Led to an Increase in Life Insurance Premiums?

This leaves the question: will you end up paying more in insurance premiums during the pandemic?

The answer is: yes and no. The good news is, if you’ve already chosen a life insurance policy, your existing premiums will not go up due to the coronavirus. On the other hand, if you don’t have a current life insurance policy and are planning to buy one now, the increased mortality rate and health risks in the midst of the pandemic means you could end up paying higher premiums — meaning it would be wise to shop around for the best policy you can find.

Are There Any Restrictions If You Buy a Life Insurance Policy During the Pandemic?

When buying a life insurance policy, one of the first questions people have is: will I be covered if I get coronavirus?

Again, it depends on the circumstances. In the case of existing policies, the beneficiaries should receive the death benefit in case of your passing, regardless of other circumstances.

If you’re purchasing a new policy, then there may be complications. First, you’ll have to be truthful about any travel history and / or medical conditions when applying for your policy, especially if you’re experiencing any symptoms.

Also, if you’ve recently traveled internationally (within the past 30 days), many insurers will require you to wait 30 days before applying for a policy. You may also be asked to submit to a medical examination, so the insurer can make an accurate judgment about the state of your health and set your premiums appropriately.

Should You Get Life Insurance Now?

Is it a good idea to get life insurance now, in the midst of the pandemic? If you’re concerned about the future and well-being of your family, the answer is yes — if you can afford a life insurance policy, the peace of mind alone will be worth it.

When deciding on a policy, you should also know about the types available:

  • Term life insurance, as described above, which is good for a set number of years, and which includes only a death benefit (a monetary lump sum) and not a cash value benefit (an additional sum of money that accrues over time, like a savings account or investment would). 
  • Whole life insurance, which combines a death benefit and cash value accumulations. Whole life policies are considerably more expensive, but have a fixed premium that doesn’t change over time. 

While life insurance can be a major investment, it’s an important step toward securing financial stability for your loved ones in case the worst happens. With the pandemic making life uncertain, taking those steps has become more important than ever before. 

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