This year, we’ve truly experienced a whole new world, and have seen many changes in the way we go about doing things. Additionally, many people felt uncertain about how the COVID-19 pandemic will affect their life insurance premiums, or how they go about purchasing life insurance.
This is, of course, completely understandable, so to demystify the process and help you understand the topic — we’re going to delve deeper into it. To understand how COVID-19 may affect your life insurance costs, there are several key factors that we need to consider.
The Global Economy Affects the Prices
During 2020, with many businesses closing, various financial markets, as well as the global economy, had taken quite a hit. Moreover, as there’s not a resolution date in sight, many are feeling the pressure of dealing with an unstable and unreliable market. Life insurance companies are no exception to this, and are currently experiencing increased incurred claim costs, and having to pay on more policies than before.
Some experts even feared that life insurance companies will start raising premiums to make up for the loss. Luckily, we haven’t seen that happen yet, and as long as you’re up-to-date with your payments, you have nothing to fear. So, know that your current premiums won’t increase and your policy is still valid.
Purchasing Life Insurance
Despite the challenges that the pandemic has caused, you can still purchase life insurance just as you did before. Additionally, some insurance providers have even made the process significantly more lenient, allowing you to purchase life insurance easier and quicker.
For example, many carriers have postponed or waived in-person medical exams until further notice — and as a result, are rejecting fewer applicants in general. So, while you’ll still be required to fill out a health history questionnaire, the chances of you being a valid candidate and getting better life insurance quotes are much greater.
It may be too soon to tell what kind of impact COVID-19 will have on life insurance in the long run, as there are multiple factors to consider here. First of all, medical professionals aren’t sure of the long-term impact of COVID-19, and whether it carries lasting consequences. Thus, we don’t know how life insurance companies and policies will respond to this.
Some estimates are that insurance companies will set up special packages for COVID survivors and create policies according to them. However, experts fear that these costs will be higher, as the need for vaccination and additional treatment arises. Others predict that the current pandemic will be established as a part of seasonal respiratory illnesses, which also likely increase premium costs.
In the future, it’s likely that the structure of life insurance will change, in addition to the prices. However, that doesn’t have to have to be a bad thing, it just means that it’s going to be different, and better equipped to deal with the new norm.
All of that being said, as long as you’re honest on your application, and keep current with your payments — you’ll be set. Moreover, with any valid life insurance policy, you’ll be able to keep the same level of coverage and won’t have to fear anything.