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- As the global health crisis spreads, the coronavirus spreads, some life insurance companies and agencies are seeing an increase in the number of applicants for life insurance coverage.
- It's not too late to sign up if you think about it. Nothing will change if you already have a policy.
- Basically, the same rules apply that always have: Shop around for a policy before choosing one, and be sure to be honest about the application, otherwise you could void your coverage.
- Learn more about personal finance coverage »
In a global health crisis, life insurance can be confusing. Will it still cover you if something does happen? And, is it too late to register?
You're not the only one with life insurance on your brain.
Fabric's online life insurance agent has seen a 50% increase in applications since February, Allison Kade, organic growth manager for Fabric, told Business Insider. Amy Danise of Forbes reports that the online life insurance agency LifeQuotes has seen a 29% increase in claims since January 20.
While Kade says there is no certainty the increase is related to the virus, she suspects it has caused people to think of life insurance that would normally have postponed it. “It's scary, but it's also a great excuse to do something that even when the panic eases, you'll be glad you did,” Kade said.
1. If you already have life insurance, don't worry
Anyone who already has life insurance doesn't have to worry about their policy – it's already in place and no virus can change that.
If something should happen to you, your policy will cover it. Nothing will change, so there really is no need to worry. Even if you are in an affected area, your policy and monthly premiums likely won't change – the rate you have is locked in for the life of your policy.
2. Potential price fluctuation is now a good time to apply
Insurance prices are constantly fluctuating due to many factors. While life insurance would certainly be affected by an influx of deaths, its prices can also vary depending on the market and interest rates, which play an important role in how life insurance companies earn money. money by investing.
Tim Zawaki writes for S&P Global Market Intelligence that historically low interest rates could pose a threat to the life insurance industry, affecting its investments and ultimately its profitability. But, he writes, it's still too early to say how much this could lower life insurance prices for consumers, if at all.
Kade expects prices to remain stable in the short term, without much change. “If you are a healthy youngster and applying for life insurance, your rates should not be changed due to this coronavirus,” she said. “The application process is the same if you apply today as if you had done two months ago.”
In the long run, anything can happen. However, anyone concerned about a possible future price increase could benefit from a request now.
3. If you are applying, don't lie
Lying about your life insurance proposal could cost you money, and it's not worth risking the validity of your policy to save a few dollars. Lies about your health or condition will likely be caught, as life insurers can check medical records and can go as far as canceling your coverage, according to Policygenius.
While many online life insurance agents like to ask for travel history as well, Kade says it's not related to the virus. “This question predates all concerns about the coronavirus,” she said. For Fabric, Kade says the answers to that question are more about the level of risk posed by travel and that some destinations are more risky than others.
Lying about the travel history part, or any other part, of your claim could constitute fraud. You better tell the truth.
4. If you are applying now, don't forget to shop
As always with life insurance, you'll want to shop around and make sure you're getting the best deal possible. Each insurance company treats your information differently, and companies price your policy based on your individual risk profile.
To avoid paying more than you should each month for your policy, get quotes from several different insurance companies or life insurance agents online. Compare them to find the best coverage for the least money and you'll find the one that's right for you.
Fabric offers term life insurance policies for parents. Get a free quote for coverage and see how affordable life insurance can be ”