COVID-19 (Coronavirus) and Life Insurance

As of April 19, 2020

As COVID-19 (often referred to as the coronavirus) updates become world news, you may start to think about buying a life insurance policy or wonder how an outbreak might shape the policy you already have.

First of all, you aren’t alone. Life insurance sales are surging right now as people are thinking: How can I financially prepare myself, and my family, just in case?

Let’s talk about the most frequently asked questions when it comes to COVID-19, and how they will impact any existing policyholders or new applicants!

Yes, once your life insurance policy is in place, it will pay out for all types of death, including anything related to complications from COVID-19 or any other disease.

The only exceptions are suicide in the first two years or if your policy includes a clause excluding a specific cause of death (like skydiving if you are a pro skydiver).

That is good news for anyone who already has a life insurance policy! Whether you’re just coming off a cruise, travelling to a risky area or the virus has already hit home, life insurance companies can’t change the rates you pay. You can sleep soundly knowing you are covered.

Are there any changes to the life insurance application process for Canadians?

For most people, no. However, travelling to destinations on the Government of Canada’s COVID-19 warning list can impact the life insurance application process. At this time, recent travel to any COVID-19 'hot spots' or any travel planned in the near future could cause your insurance company to postpone your approval until some time has passed after you arrive back in Canada.

It is also likely that your insurer will want to know the specifics related to any planned travel over the next 12 months. If you are applying, it would be beneficial to record planned travel location details (cities and/or regions) and timing before starting the application process!

Remember, always tell the truth during the application process. If you withhold information, contract the disease in question after travelling to a risky destination, and pass away from it, the life insurance company has the right to refuse to pay out the death benefit to your beneficiaries.

What if I’ve already contracted COVID-19?

If you have tested positive for COVID-19 before you applied for life insurance coverage, you might end up receiving a lower health rating and a costlier life insurance policy. Some life insurance companies may even postpone your approval until you have made a full recovery. Regardless, it doesn’t hurt to apply!

However, if you get ill, make a full recovery, and later apply for life insurance, we expect that the price difference in life insurance premiums will be minimal. 

Can I still complete the in-person health exam if it is required?

As of the end of March, In response to COVID-19, nurses are no longer visiting homes to collect blood and urine samples. The good news is that most companies have now replaced this visit with a quick and simple health telephone interview instead. For the interview, a healthcare professional will give you a 20-30 minute call to ask some questions over the phone.

Generally, life insurance applications required blood and urine samples when an applicant was over the age of 50 or if they were applying for over $1MM in coverage. For now, insurers are looking at these applications on a case by case basis to determine whether they can approve the policy without the need for fluids. It is possible that if you have applied for a policy that is greater than $1MM, you may need to decrease your coverage amount for the time being until the environment changes and in-person medical visits resume.

Are there any changes to approval rates?

Not at this time! Approvals are coming in at the same rate as in the last few months. If the situation changes, we’ll provide updates.

Will this affect approval for someone with a severe medical condition?

Shopping for a life insurance policy can be especially intimidating for anyone recently diagnosed with a severe health condition such as a heart attack, cancer or a stroke.

Simplified issue or guaranteed issue products are life insurance products that do not require medical exams (or sometimes even medical questions) to qualify. The tradeoff is that the policies are much more expensive than traditional term life insurance and usually cap you on the total amount of coverage you can buy. But if you’re unable to purchase regular term insurance, a simplified issue or guaranteed issue life insurance policy could be an excellent way to get some life insurance coverage and a small death benefit for your family. Canada Protection Plan is a leading provider of No Medical & Simplified Issue Life Insurance in Canada. That means that they do not require the extensive medical telephone exams needed with the other insurers in Canada. Compare Canada Protection Plan life insurance quotes today.

Have life insurance prices increased as a result of Covid19?

To date, life insurance companies have not increased their prices to reflect the additional risk associated with COVID-19 and we don’t expect them to in the near term.

You could argue that life insurance is currently underpriced. The value you are now getting for a dollar of life insurance premium is a lot higher than it usually is.

Should I buy life insurance during a pandemic?

We would never suggest that everyone should drop what they are doing and immediately buy a life insurance policy. The truth is, if you do not have a life insurance need (as many don’t), then you should never buy it, irrelevant of how good the value currently is. But, if you have dependents that rely on you financially, and have been putting off applying, now might be the right time to do so.

For more common life insurance FAQs, click here.

How to get a life insurance quote

If you’ve ever looked into life insurance before, you probably know that it’s pretty easy to get life insurance quotes. What’s downright confusing? Trying to compare the quotes and understand what each one offers.

There are several places to get life insurance quotes. Many companies will even give you instant life insurance quotes online.

  1. You can go directly to a life insurance company online (like TD bank)
  2. You can go through an independent local insurance agent
  3. You can buy insurance from an independent broker online

Buying life insurance from an independent broker (either local or online) is always a smart decision. Why? Because agents who work for a single life insurance provider won't help you get life insurance policy quotes from a variety of companies to make sure you get a reasonable price. Life insurance prices are very complicated and can vary widely across companies for the same type of policy. So unless you want to spend more than you have to on life insurance, it’s essential to shop around and compare quotes.