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

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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.

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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

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Start With Where You Are

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Start With Where You Are

By: Tiara Davis

Hey Cousin,

You aight? The quarantine snacks hittin’ ya pockets heavy? Them recipes on Youtube all fun and games ‘til you hit the checkout line. Since when it cost 55 dollars to make tacos?!

This me, “ Oh naw, take that off, “ and then, “ You can put that back.” And there are other times where I’m like you know what, “Treatcho self Fam.” And so, I spend 60-75 dollars on various cooking items that I’ll probably never use again. 

But I ain’t stressed. Ask me why cousin?

‘Cause I’ve saved for moments like these. Food is being marked up at my local grocery store, my position is no longer certain and I swear I got a text message from Furlough sayin’, “ You up?”

In the past, I put a little money away until I was stable enough to build an emergency savings fund.  Lemme’ show you how.

First, issa a whole lot of literature about the importance of an emergency savings fund. The experts encourage us to save 20% of our income or  3 – 6 months of our expenses. A quick google search will render countless options of “how tos” and “why comes.” 

As a young professional, all of those figures seemed out of reach. So I didn’t use it. 

I started with what I had which amounted to 100 dollars per pay period. In 6 months, I saved $1200; enough to cover my rent ($595), car note ($189), insurance ($134), and phone bill ($56). I highlighted some of my monthly expenses because I want you to remember to track yours. 

In that time, I built the mindset, built the habit, and most important, learned to live without it. 

It was too easy.

So I doubled it.

 

I started saving $200 per pay period. Four hundred a month, for six months, das about $2400 plus my other $1200.  That’s a calm $3600! We out here lookin’ cute fam. She really shapin’ up to look like somebody’s fund!

 

I used the same tactic until I was living off fifty percent of my monthly income. The check I received on the 1st was for me, and the check I received on the 15th was for future me. 

 

I built the emergency savings until I saved my yearly salary. I know, I know, girl whet?! I like a challenge. 

 

But that’s just it. You set the goal. Crush the Goal. Set another one and then set your sights on something greater. Real estate could be cute. What y’all think?

Let’s chat in the comments! What do you plan to start with?

Love Ya Cuz,

Tiara Davis

 

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Power of the Dollar!

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Power of the Dollar!
By Shana-Lee Scott

As we come off the heels of Juneteenth with celebrations from posting on social media, to supporting black owned businesses, parades, some companies even deciding to make it an official holiday, to us celebrating with Alicia Keys and John Legend. This was the year more people decided to learn about Juneteenth and to celebrate it. We can all admit, 2020 has been full of so many emotions and we are only in June. This is such a pivotal time in America where Blacks and some of their allies are all saying enough is enough and this is the year we are demanding change.

How to Leverage Our Economic Power

On July 7th, Blacks and their allies have chosen to blackout this day by not spending any money for a full day in hopes to leverage our economic power to resolve police brutality and racism towards Black people. We are at a point in America where we all may have asked this question, or had conversations with family and friends, what would we have done during the Civil Rights Movement? On July 7th you get to answer that question. We all have our ways in supporting the current climate in America, by protesting, registering people to vote, being vocal on social media, donating to social justice organizations, and/or learning about our own history, but on July 7th we all can stand in solidarity.

The True Power of Black People

According to 2019 Nielson’s Report, African Americans have a $1.3 trillion buying power! African Americans outspend other races, and that is how we will bring attention to our demand of wanting real change by making an economic impact. When African Americans band together we bring results, in March a group of women decided to attack Beatrice Dixon, the creator of Honey Pot for her Black History Month Target ad, when Black women heard about this, we went out, bought and sold out the Honey Pot at Targets across the country. In 2018, Black women pushed Doug Jones, a Senator from Alabama to win as State Senator, and we can go as recently as 2020 when North Carolina came into play in the primary Black people spoke, and Joe Biden won his first primary race. There are endless stories of when Blacks decided to make a point, band together, and the results follow. We have receipts to show for it.

These Are the Demands from Black-America

On July 7th, we have the power to show America we don’t want change, we demand change. We have that same power with our own finances to not spend a single penny. Leading up to that day and afterwards we must decide where and who gets our money. In this movement, we are starting to intentionally spend our money at Black Owned Businesses. Facebook groups are being created, word of mouth is spreading information, and websites are seeing more traffic that provides information on Black Owned Businesses. These businesses are seeing more customers, and doing well. We are pouring our money back into our community and we are doing this one business at a time with our money. That is the power we have with our money.

This is a Movement That Can Last Generations

On July 7th not only can we take back our power as consumers, we can take back our power in our finances. We can start thinking about our household finances. How our call to action affects our children and future generations. This is the time that as a community, we start thinking about our savings, credit, debt, and pouring back into our community. As we have more access to learn about Black Wall Street and Seneca Village, we need to challenge ourselves to do better. You have that same power with your finances to demand a better life for yourself and generations to come. Now, this time may be difficult for you financially because you may have lost your job, but I still want to challenge you to take that hard look at your finances, examine where you can cut back, start saving even if you can only afford $5, take a free credit course to examine how you can improve your credit, make a plan to tackle that debt, and invest in black own businesses. Just start!

The Time is NOW to Live Out Our God-Given Abundance

We have entered a new decade and even though 2020 has been rough for many of us, I believe this is the decade financial freedom will be seen by many people. As we sat in our homes due to Covid-19, many of us began to realize we like our own home cook meals, we realized we are innovative by thinking of ideas to make our household run smoother, and that we are adaptable, we started having mini concerts in our home by way of Instagram. For some of us, the stillness of isolation and social distancing allowed business ideas to clearly take form in our minds that allowed us to clearly articulate the business plan that was laying dormant within us. I believe this season is the season you will look at your finances and start making changes. You will start manifesting the dreams that you desire. You will start setting goals and this decade is the decade you will see every dream you desire come true. This is the decade, we will not only realize our power as a consumer, but we will revitalize our power in our own finance, so that we can live and walk in our abundant life.

We are only starting on July 7th, there will be more days. The Montgomery’s Bus Boycott lasted 381 days, so get ready to buckle down and stand in solidarity. Here are some resources on July 7th and that can also direct you to Black Owned Businesses in your area:

  • How-we-Fight.com
  • Black Dollar Black
  • Black Wall Street App
  • Webuyblack.com
  • Eatblackowned.com

*This blog in no way endorsed any political party.

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Personal Finances

Charlamagne tha God says Joe Biden May Spark Voter Depression and He’s Right!

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The Breakfast Club radio host Charlamagne tha God on Sunday warned that Democrats could face a “voter depression” on Election Day because people still aren’t enthused by presumptive Democratic nominee Joe Biden.

Biden came under heavy fire on Friday after he defended his record during a conference call interview with Charlamagne, at one point telling the black radio host that if he has a problem “figuring out whether you’re for me or Trump, then you ain’t black.” The former vice president later apologized for the remark, saying that “no one should have to vote for any party based on their race or religion or background.”

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Joe Biden is taking on President Trump over the economy.

The former vice president’s campaign believes he has an opening with voters on an issue that has been a strength of Trump’s given the economic harm caused by the coronavirus pandemic, which has locked down businesses and led to skyrocketing unemployment.

They plan to argue that Trump handled the pandemic poorly, is mishandling the economy, and that their candidate is the better leader to shepherd the country to recovery.

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