COVID-19 affects life insurance in some obvious and not so obvious ways. There is an understandable slight shift in the way we are doing business. Here are some of the ways in which these extraordinary times have changed the life insurance process.
1. Consumer interest in life insurance is strong. This virus has people thinking about their mortality, and life insurance is increasingly top of mind now, with more people investigating options.
2. Consumer questions about the impact on life insurers’ financial strength are out there. Economic issues and underwriting issues unrelated to COVID-19, such as opioid use and distracted driving, still appear to be a greater concern for life insurers than SARS CoV-2, the virus that causes COVID-19.
3. Scheduling underwriting exams can be more complicated. What is now becoming a greater challenge is required offsite medical exams for approval with some life insurance policies. Thankfully there are accelerated underwriting options out there that help people skip the usual medical exams.
4. Underwriting seems to be changing, some. You can figure that if you’ve recently returned from one of the places in the world that are COVID-19 hot-spots, one might expect most of the insurance companies to postpone underwriting your application for, say, 30 days.
5. Falling interest rates may be creating a short, onetime increase in product sales. The Federal Reserve Board has tried to lower the interest rates it controls in an effort to help businesses and investors get through COVID-19-related lockdowns, quarantines and supply disruption. Many life insurers are responding by increasing prices for interest-sensitive products, pruning benefits, or ending certain product sales.
6. The current situation may be giving agents a good opportunity to talk to consumers about the value of insurance, and of agents. Agents can help answer many common questions about the COVID-19 pandemic, such as whether life policies protect the insured against pandemic viruses, and how the current travel restrictions might affect someone’s life insurance application.
COVID-19 affects life insurance, but not in dramatic, life-changing ways. It is worth considering how this fits into your life and planning. We recommend that now, and anytime there are extraordinary life conditions, you speak with a life insurance professional and your financial planner. The Ziff Agency offers the expertise to review entire plans for you, your family, and your business. Contact us today.