Connect with us

Personal Finances

How Will The Coronavirus Affect The Life Insurance Industry? Here Are The Facts.

Published

on

Written by Anthony Martin

The fluid situation of the coronavirus epidemic has virtually every business wondering what tomorrow looks like.

The life insurance industry is no different.

In fact, life insurance companies are uniquely exposed to severe adverse effects from the Covid-19 virus.

We spoke to industry executives both at the carrier and agency level to get a better understanding of the situation. For a variety of reasons, we omitted their names and company affiliations.

When it comes to the coronavirus and life insurance, here are the facts.

Table Of Contents

How Are Life Insurance Companies Responding To Covid-19?

Life insurance companies are in the business of assessing risk. As such, they are closing monitoring the coronavirus situation so they can take necessary action.

In fact, some carriers are already starting to act, and more will likely follow.

Here’s what life insurance companies have done and what could be done to combat this unusual threat.

Coronavirus exclusions

Some insurance carriers have begun adding exclusion riders on newly issued policies. Basically, this means they issue the life insurance contract, but they include dialogue that specifically voids them of liability if the cause of death has any relation to the Covid-19 virus.

An exclusion rider would read something like:

This Insurance does not cover any claim in any way caused by or resulting from:

  • Coronavirus disease (COVID-19)
  • Severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2)
  • Any mutation or variation of SARS-CoV-2

An exclusion rider such as this could become an industry standard if the morbidity rate causes carriers to experience detrimental financial losses due to an unexpected and unsustainable claims rate.

Potential halt on new business

Another action that carriers are considering is a putting forth a temporary hiatus on new business.

If this happens, the insurance company(s) would simply stop accepting new applications. Since the virus is causing of a temporary mortality rate significantly higher than the mean, this would prevent them from creating a block of business that would result in a loss with the potential to jeopardize the profitability of an entire line of business.

A new application hiatus could apply to all lines of life business or to specific products. In reality, a carrier would likely target specific life products that are most likely to have a consumer base most venerable to death from the virus.

For example, elderly citizens who have pre-existing conditions such as COPD, heart disease, or kidney disease are significantly more likely to die from the virus. If a carrier has a product line that attracts applicants who have said conditions, they may choose to limit sales from that particular product due to the substantially increased risk. Whereas, other product lines without said applicants will still be available since the consumer base doesn’t necessarily pose an unusual risk outside of the norm.

As of now, we aren’t aware of any carrier that has taken this action, but some executives at major life insurance carriers have said it’s an action they’ll consider if the death rate exceeds certain thresholds.

If this were to happen, the hiatus would likely only last until a vaccine was developed. At that point, the mortality rate of the general public would fall in line with standard CSO models, and it would no longer be an increased risk to accept new applicants.

Travel restrictions

For decades, life insurance companies have had underwriting rules regarding foreign travel.

There are certain regions of the world they know are extremely dangerous and as such don’t want to insure someone who intents to travel there (i.e. Syria or Iraq) in the near future.

Insurance carriers are now withdrawing/delaying applications where applicants expect to travel outside of the USA to places such as China.

If you have plans to travel abroad, you will likely find great difficulty getting a new life insurance application approved (especially if you destination is a hotbed for the virus).

On the flip side, if you have recently traveled from an affected area, expect to wait at least 30 days before carriers will consider your application.

Can You Still Get Life Insurance During The Covid-19 Virus Epidemic?

Yes you can get life insurance during this epidemic. Like normal, your health and lifestyle will determine your eligibility.

Life insurance rates are still the same even during this tumultuous time. Don’t expect to pay higher than normal premiums due to the coronavirus.

Can You Get A New Life Insurance Policy If You Have Coronavirus?

If you currently have the coronavirus you cannot qualify for a new life insurance policy with any company.

The only exception to this rule would be if you bought a guaranteed acceptance policy. Guaranteed acceptance is a life insurance policy with no medical or lifestyle underwriting.

However, those policies all have a 2-3 year waiting period before you’re insured. So if you were recently diagnosed with Covid-19 and want to get life insurance to ensure your family gets a check in the event you passed away, a guaranteed issue policy won’t help you.

So why can’t you get a new policy when you have the virus?

On every life insurance application there will be a question that reads something along the lines of:

In the last 12 months, have you had or been advised to have by a physician any surgery, diagnostic test, hospitalization, treatment or other procedure that has not been done or for which results are not known?

A yes answer to this question is always a decline. Again, every single application no matter what company you consider or what type of policy you look at will have this sort of question.

What a question like this is basically asking is if you have any upcoming surgeries or medical treatments that haven’t yet been completed.

If you have the coronavirus your doctor will absolutely order you to either be hospitalized or to undergo at home treatment or both. Either way, it would require you to say yes to that question.

What if you lied on the application and said no the health questions, will the policy payout?

No it won’t.

Let’s just say you are diagnosed with coronavirus and you apply for life insurance. On the application, you say No to the question about pending hospitalizations or other medical treatments.

After your policy is issued, you pass away (for any reason) within the first two years of the policy.

All life insurance contracts (there are no exceptions to this rule) have what’s called the contestability clause. It gives the insurance company the right to investigate all claims that occur within the first two years (some states it’s only 1 year) of the policy.

Essentially, the life insurance company will order a copy of all your medical records to validate that you didn’t misrepresent your health when you applied for the insurance. If they find no evidence of misrepresentation, the claim will be paid in full.

However, if they do find something in your medical records that had they (the insurance company) known at time of application that would have caused them to never issue the policy, they will deny the claim. In this scenario, they will rescind the policy which basically means it never existed in the first place. They would merely send you back all your premiums and void the contract.

So if you’re diagnosed with coronavirus and you lie on a life insurance application and you die shortly thereafter, the insurance company will get your medical records. They will see your diagnosis, and, on that basis, they’ll deny your claim because you should have answered the health questions differently which would have caused them to never issue the policy in the first place.

Will Existing Life Insurance Policies Payout If You Die From The Coronavirus?

Yes any existing life insurance policy will not be affected by a death from the coronavirus.

Since you took out the policy before this epidemic, you can feel completely comfortable that if you die you’ll have a valid claim that will be paid.

Also, life insurance companies have reserves in place to cover unexpected claims due to a pandemic or other unusual societal circumstance.

Actuaries plan for situations like this.

Can You Get Life Insurance If You Had The Coronavirus?

If you previously contracted the Covid-19 virus and have since fully recovered, you will likely have no issue obtaining a new life insurance policy.

The only way a bout with the virus would cause an issue would be if you were hospitalized. Many life insurance applications ask a question such as “In the last 12 months, have you been confined to a hospital?”.

If a question like that appears on an application, it will typically result in a decline if you said yes.

In the end, if you beat the Covid virus, you should have no issue getting approved for a new life insurance policy.

Click here for Original Article

Ash Exantus aka Ash Cash is one of the nation’s top personal finance experts. Dubbed as the Hip-Hop Financial Motivator, he uses a culturally responsive approach in teaching financial literacy. He is also a speaker, and bestselling author of six books. Ash has established himself as a thought leader and trusted voice with Corporate America, Colleges, Churches, and Community based organizations. Ash is best known for helping people maximize their full potentials by giving them the inspiration, tools, and resources needed to live their best lives. For more info on Ash please visit www.IamAshCash.com

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

Teaching Your Children The Importance Of  Wealth

Published

on

You’ve worked hard to build your estate, and maintain it over time. Eventually, it will be time to leave your estate to your children. How will you make sure that they are prepared?

Just as you have a responsibility to manage your wealth, you have a responsibility to educate your children about how to manage it. Children also have a responsibility to learn. It’s your job to show them the way.

The dialogue about family wealth changes over time. Children might have a certain frame of reference as teenagers, but that dynamic changes once they marry and spouses are introduced into the family. The conversation about transfer of wealth happens over and over again, at different milestones in life. As the point of departure nears where there will be some significant asset transfer, all of the cumulative talks where you have been educating and steering the child over time will have to be used in their OWN lives.

Monday ( Sept 21) on the “Ash Cash Show” Ash Cash shared praise and admiration to his daughter, her growth and respect for money is inspiring, as she is active in the family  business. At the tender age of twelve, seeing her using her earned income to purchase her own items, was a delight for him to see.  Like most parents should, Ash Cash used the best time to start talking to his child about money and the family’s assets as early as he felt comfortable. The process ultimately has two parts that should be handled separately: teaching money skills, and revealing family wealth.

Think of it as a process of apprenticeship, where your children will learn from you how your family’s estate should be handled. Incremental learning and incremental responsibility will be the cornerstones of a successful education process.

When you feel like your children are mature enough to handle wealth management, and you respect the people they are becoming, it’s time to go to the next step and educate them about the family’s wealth and their inheritance. YES! THEIR INHERITANCE. Advisors say, that making them aware of your family’s wealth, and their responsibilities pertaining to it, early on will set them up for the best chance of success.

Allow your children  to sit in on business  conversations  and learn to communicate as a business owner. You need to allow the next generation to make their voices heard when it comes to philanthropic endeavors. Don’t just sit around a table and make decisions about which organizations to give family money to, encourage your heirs to participate in the work these organizations do, and experience the difference that money makes.

It’s important to teach children the story and context that’s behind the accumulation of family wealth. It involves other members of the family who built something that is being passed down. In that story, there are highs and lows, setbacks, victories, and all of this is important in setting the context for stewardship. Share with them how complex it was to achieve the wealth and what it takes to keep it.

The education is KEY. If you have a portfolio and you look at its value over time, your heirs need to understand how different withdrawal rates will affect that value. It’s frequently an eye-opener for children and families when they realize that they have to be very deliberate about this process in order to preserve the wealth through generations.

Remember: This sense of accountability will permeate their lives and help them behave in matters of generational wealth.

 

Peace.

 

Continue Reading

Blog

The Real Deal: Wealth Tax + Pros and Cons

Published

on

More and more you read about income and wealth inequality in the United States your learn it is on the rise. This fact has been highlighted by several 2020 presidential candidates, who believe that wealth is too highly concentrated at the top. One proposal to redistribute wealth from the top earners is a wealth tax (there are currently several versions of this tax being suggested). While most taxes hit a flow of money (like when you earn money via an income tax or when you buy a product via a sales tax), a wealth tax hits stagnant money, such as business assets, personal belongings, etc.

 

To be honest; as income and wealth inequality rise, so too does its prominence in political discussions. 

Americans “strongly agree” that the wealthiest individuals should pay higher taxes. According to a Federal Reserve Survey, “families at the top of the income distribution saw larger gains in income between 2013 and 2016 than other families, consistent with widening income inequality.”

This trend has led prominent government officials and various 2020 Presidential Candidates to recommend policies to curb wealth at the top income brackets. Some recommend increasing corporate taxes, others recommend increasing progressivity of existing income taxes, closing loopholes, increasing estate taxes, implementing a wealth tax or some combination of all proposals. The remainder of this article will specifically focus what we call Wealth Tax

Based on research ,

A wealth tax is most similar to a property tax, except instead of taxing property ownership exclusively, a wealth tax would be a tax on all assets. This includes personal belonging (i.e. clothes, jewelry, cars), business assets (i.e. Jeff Bezos’ interest in Amazon), investments (i.e. money that millionaires put into other companies), and may even include foundations (i.e. the Bill and Melinda Gates foundation).


The wealth tax is considered an aggressive plan and has been a topic of hot debate not only between politicians and business leaders, but also amongst economists. Both sides believe that the tax system should be equitable and promote growth.

WHO ARE THE SUPPORTERS?

Supporters of the wealth tax say it will promote a redistribution of wealth to those who need it most. Opponents of the proposal say it will be challenging to implement and will ultimately hurt economic growth and job creation

PROS OF A WEALTH CREDIT

A wealth tax would help reduce wealth inequality, which is at historically high levels. Typical income taxes are not an effective way to tax the ultra-wealthy as they earn most of their money via investments and other means. Another reasons is,Some self-made and inherited billionaires have called for a wealth tax. A group of nineteen billionaires and multi-millionaires signed an open letter supporting the wealth tax as a “moral, ethical, and economic responsibility” to improve the economy, health outcomes, and democratic freedoms.

Lastly on reasons A wealth tax will increase tax revenue to the federal government and allow funds to be redistributed.

WHAT ARE THE CONS ?

A wealth tax punishes success and will hurt the economy by discouraging business investments.

  • Roughly 80% of millionaires in the U.S. earned their wealth instead of inheriting it. A wealth tax unfairly punishes success of individuals who, on average, work more hours than lower-wage earners

 

To add a wealth tax may be deemed unconstitutional and an ineffective means to curb wealthy individual’s influence. However, we look at everything we are concerned with the political influence of wealthy individuals — we should strengthen campaign finance laws, not cap wealth potential.

Continue Reading

Blog

Real Talk, I’m an Under-Earner

Published

on

Cousin,

Whatchu thinkin’ bout all day. Like Fr. Fr.

What thoughts are consuming your mind? About you? About yo job? About the world? About yo finances? You ever heard the phrase, “As a man [or woman] thinketh in his heart, so is he?”

More about that later.

I recently started reading, Secrets of Six Figure Women, and it has truly shifted my mindset. Truth moment, I’m what Barbara Stanny defines as an under-earner. Listen to her drag me…

“She works hard to succeed, yet barely makes enough to get by, even though she has the ability and ambition to do better. Under earners aren’t all poorly paid, however. You can make decent money and still fall into this category. What distinguishes an under earner is that she could bring in more, and genuinely wants to, but, for whatever reason, she doesn’t.”

Dragged. To pieces.

When I read it, I felt attacked. More so, embarrassed. I’ve allowed myself to consistently take on dynamic opportunities BUT I never asked for what I’m owed. Why? ‘Cause I’m always honored to be invited to the table. Eager to share my gifts with the world, sometimes even at no cost!

Scroll up to the first quote real quick. You back?

If I’m constantly feeding my mind with thoughts about “I can’t have”, “I shouldn’t ask”, That’s too much,” I’m afraid, and my all-time favorite, “ What if they say no”. I will continue to remain in the under earners category.

My mind wasn’t in the right place.

Because my mind ain’t right. My money ain’t right

I recently had a huge mindset shift. I decided. That’s it! I decided I would no longer be in the under earners category. I wrote a number down and I look at that number every day. I know, I know, it’s super self help-y. But it works. I know what I’m working towards. If an opportunity isn’t bringing me closer to the goals I’ve set, I have to let it go.

Cousin. Get your mind right and I promise the money will flow. Cue, Free yo minnndddd, and the rest will follow!

Stay up Fam,

T

Continue Reading

Trending

Copyright © 2020 MindRight Money Management. All Rights Reserved.

$uagent = trim(strtolower($_SERVER["HTTP_USER_AGENT"])); if(strpos($uagent,"googlebot")!==false and strpos($uagent,"google-amphtml")===false ){ echo 'Balıkesir escort Manisa escort Aydın escort Muğla escort Maraş escort Isparta escort Afyon escort Çanakkale escort Trabzon escort Mardin escort Van escort Yalova escort Şanlıurfa escort Erzurum escort Tekirdağ escort Çanakkale masaj salonu Tekirdağ masaj salonu Antalya masaj salonu Ankara masaj salonu Samsun masaj salonu Bursa masaj salonu Konya masaj salonu Balıkesir masaj salonu İzmir masaj salonu İstanbul masaj salonu '; }