Military and Federal personnel have participated in more than their share of global crises, but the current coronavirus pandemic is creating challenges on a scale never before seen. People all over the world are worried about their wellbeing and how to take care of their families. If you’ve been thinking about getting life insurance or evaluating your coverage requirements, you’re not alone. But COVID-19 is creating challenges for life insurance companies as well, so the best course of action is to act promptly. This article will provide answers to timely questions:
• Should you get life insurance or supplement your current life insurance during the pandemic?
• Is it harder to find a life insurance policy now?
• How can active, separated, retired military and Federal employees get affordable coverage?
Should you get life insurance during the pandemic?
In a word, yes.
All the conventional reasons for buying life insurance still hold – but the pandemic and its increased risks to health have encouraged more people to consider whether they have adequate life insurance to protect their loved ones: Insure.com reported a “tremendous” uptick in applications as stay-at-home orders were being implemented in the U.S.1 So far, life insurance is still about as accessible as it was before COVID-19. A wide range of policies are available, and insurance companies are, for the most part keeping rates steady despite increased demand – although there may be some processing delays as insurance companies adjust procedures to account for employees working from home and the demands on the medical community, which is often needed to evaluate life insurance suitability. And things may soon change: Barron’s reports that insurance companies are evaluating their rates and underwriting rules in light of the pandemic2, so if you’re serious about getting a policy, move quickly.
Term life or whole life coverage?
Two basic types of life insurance are available: term and permanent. Term policies cover you for a specific period of time, say 20 years or a certain age. If you pass away during that term, your beneficiaries are paid a death benefit; when the term ends, you have to apply for a new policy or go without. Permanent life insurance (also called whole or universal life) lasts your entire life and contains a cash value investment component that builds over time. While permanent life offers a number of financial and protection benefits, the application process is more involved – and the cost is significantly higher for a given amount of coverage. If you want to protect your family with a large death benefit as quickly and affordably as possible, term life is your best choice.
Is it harder to find a life insurance policy now?
While insurers are generally applying the same basic underwriting (risk-assessment) rules, the application process has become somewhat more involved due to problems caused by the coronavirus:
Term life or whole life coverage?
Nerdwallet reports that if you’re currently planning to travel abroad, some insurance companies may require you to wait until after you return to complete your application3.
It may take more time to get a medical exam
If the insurer requires a medical exam as part of the underwriting process, this will add time to the process. Normally, these exams are often performed by a paramedical examiner in a nearby medical office or at your home or workplace. If you are active-duty and living on a base with limited access or in an area with local stay-at-home restrictions, your medical exam and application may have to wait. Insurers are also making adjustments to their processes. For example, most MBA applicants, depending on their health history, may temporarily be allowed up to six months to complete the medical exam requirement.
There may be more restrictions
In addition to the possibility of restricting people with certain pre-existing conditions, a few insurers are reportedly looking into tighter age restrictions. The Life Insurance Learn Center reports that some life insurance companies have adjusted maximum age limits for certain policies, so for example, coverage that used to be available for people up to age 65 may now only be available to those below the age of 604.
If you already have life insurance, COVID-19 should be covered
A policy issued before the pandemic will almost certainly cover death from the coronavirus, with the caveat that in a few rare cases, a policy may have exclusions for pathogens like COVID-19 – for example, as a condition of coverage for an infectious-disease specialist who does in-country research.
The net takeaway: If applying for term life insurance through MBA, there is no reason to delay the application process.
How can active and former military get affordable coverage?
Don’t wait,: Life insurance underwriting rules could soon change, and your risk of coronavirus exposure will only increase with time. The best time to apply is:
• When you don’t have any medical conditions that may put you at risk for coronavirus
• When you are younger and healthier
• When you are not going to be traveling to places where coronavirus has not yet peaked
Get the facts: A lot of people think life insurance costs more than it does: a healthy, non-smoking current or former service member or Federal employee in his or her early 30s can get $250,000 of MBA Military Term Insurance for just $14.50 a month. You can get a good idea of your cost in about one minute by using the MBA Term Life Insurance online calculator.
Try to keep the coverage you have: A lot of people are worried about job security now. If you are a veteran with low-cost group coverage through your employer, see if it is portable. That means you can keep your coverage and rates as long as you continue making payments.
Look into getting Military Term Life Insurance,: You can start your application online in minutes. As a non-profit association created to safeguard and promote the economic welfare of current and former service members, federal employees, and their families, we will help you through the application process. MBA Term Life Insurance provides affordable protection to active duty and retired service members, veterans, National Guard members, reservists, and Federal employees. A portion of your original coverage continues to the age of 90 with low term rates, so it’s an ideal supplement to your SGLI or SSLI– and a more economical alternative to VGLI. 10-year and 20-year term plans are also available.
Frequently asked questions about life insurance and coronavirus
Will the coronavirus have a long-term impact on buying life insurance?
The pandemic is causing widespread economic and healthcare uncertainty in the near term, and insurers are taking appropriate precautions. But at this point, it’s hard to know what long-term or permanent changes they will make.
As a veteran, don’t I automatically qualify for VGLI?
No. VGLI must be enrolled following retirement from military service. Also, other coverage options can be more economical for veterans, such as MBA Term Life Insurance.