COVID-19 and Life Insurance

As COVID-19 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 our most frequently asked questions when in 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 application process?

For most people, no. However, travelling to destinations on the Government of Canada’s COVID-19 warning list can impactthe life insurance application process. At this time, travel to China, South Korea and Italy 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 (about a month).

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 beforeyou applied for life insurance, 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?

Yes, these exams, called ‘paramedical examinations’ are still happening every day! However, paramedical examiners are now asking applicants about travel to high-risk countries and may postpone visits to collect medical evidence for two weeks if there has been recent travel. This may expand to a number of countries as the risk changes.

If this impacts you, you might want to consider a policy that includes an ‘express process’ (like Manulife if you are applying for less than 1 Million in coverage) or a non-medical life insurance policy from Canada Protection Plan.

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.