Applying for life insurance while quarantined

PolicyAdvisor has created a series of FAQs (Frequently Asked Questions) to help clients navigate the online insurance-buying world during the current conditions onset by COVID-19.

We previously answered many reader queries about the impact of Coronavirus on life insurance from the perspective of those who currently own or have in-force life insurance policies, as well as other related insurance products. This post addresses concerns on the impact of COVID-19 on new life insurance applications.

Can I buy life insurance during the current COVID crisis?

Yes you absolutely can. Now is always a good time to buy life insurance to protect your family.  Many of Canada’s best life insurance companies have recently increased the amount of coverage they offer without a medical test, to facilitate easier access to life insurance products during the current health crisis. So if you are in good health, this is a great opportunity for you to get life insurance without the hassle of in-person medicals! And if you have any pre-existing health conditions, we can help arrange non-medical life insurance for you from many of our non-medical life insurance partners.

Can I apply for life insurance while social distancing?

Yes, you can. At PolicyAdvisor, we work with some of the biggest life insurance companies in Canada to offer you a fully digital experience for purchasing life insurance. As well, there are several options available for purchasing life insurance, without requiring a medical exam. 

As mentioned earlier, many of our partner life insurance companies are increasing the amount of coverage one can purchase without a medical exam. Now is also a good time to complete an insurance checkup and evaluate your needs in terms of disability and critical illness insurance. Get in touch with us or use our online life insurance calculator to determine your insurance needs.

I am currently quarantining or under self-isolation. Can I apply for life insurance?

If you have recently been exposed to COVID-19, then insurance companies will likely postpone any underwriting decision around your policy’s approval. You may have to bunker down, stay safe, and ride out this difficult phase of isolation– you can then apply for life insurance once you’re ready. Get in touch with our licensed insurance experts for a free consultation – we can offer you specific advice about all your options at this time. And, you can always get instant life insurance quotes.

Are medical tests still required for purchasing life insurance?

If you are in good health, most insurance companies have coverage amounts thresholds up to which you can apply, without requiring a medical test. Recently, these amounts have been increased by most insurers to meet the higher demand for digital fulfillment and non face-to-face solutions, in light of the COVID-19 concerns.

PolicyAdvisor is a fully digital, life insurance brokerage that makes it easy for clients to save time and money while buying life insurance online. You won’t touch a pen to paper or invite strangers into your home to get covered – we ensure the entire process is done online, from the safety of your couch, desk, or kitchen table.

Can I take the medical exam at a later date, if I want a higher coverage?

If you require more coverage in the future, beyond what you receive without a medical exam, you will need to go through an in-person medical exam. Going through a medical exam can also allow you to be eligible for preferred/ better pricing than standard rates. A medical exam can be arranged for you depending on your availability and convenience and upon resolution of the current COVID situation.

Can I get coverage if I travelled outside of Canada recently?

Yes, you can. During the life insurance application process, you will be asked about your recent and planned international travel. If you have recently returned from a COVID-affected location, insurance underwriters may seek to postpone the decision, until a sufficient self-isolation period has been completed.

Apart from COVID-19, if you frequently travel, or have travelled multiple times in the past to certain areas deemed as risky destinations, your policy may be given an exclusion for that.

I am a healthcare worker. Can I get life insurance coverage?

Yes! Of course, you can. There are no exclusions for health care workers. Get an instant life insurance quote from our site, or schedule a call with us today!

Will I pay higher premiums if I apply for life insurance during COVID-19?

Currently, the coronavirus pandemic has not changed life insurance premiums. As we mentioned above, in view of the current health crisis, life insurance providers have expedited the insurance buying process and generally increased the amount of coverage you can obtain without a medical exam. Depending on your age and health situation, you may be eligible for coverage of up to $1 million without medical testing of any kind. Such coverage continues to be priced at standard rates, without any additional premium for Coronavirus related risks.

Will Coronavirus impact life insurance premiums in the future?

Speaking honestly – there is no way to know for certain at this time. Insurance companies look at longer-term mortality models and interest rate expectations to build their pricing. Shorter-term events (which the Coronavirus pandemic is for the time being – though that may change) do not have a material impact on pricing.

However, insurers and reinsurers are currently assessing the impact; if this situation persists, prices may indeed change. If the situation continues to develop adversely, there is a likelihood that insurance companies will tighten their underwriting norms with time. For example, Prudential Financial, a US-based insurer, stopped accepting life insurance applications for its longer-term product. If the market volatility and pandemic continues, such changes may also be introduced in Canada.

Is there a waiting period for any claims if I apply for life insurance now?

The short answer is: There are no new elimination periods or rules based on COVID-19’s effect on public health. Most life insurance policies do not have any waiting or deferral periods. Waiting periods are only assigned if there are existing health issues, as in the case of guaranteed life insurance policies.

Will my coverage end if I lose my job due to COVID-19 and can’t pay my premiums?

Most insurance companies allow a one-month grace period, during which time you can catch up on an unpaid premium and prevent the policy from lapsing. In light of the extraordinary impact of the current crisis on employment levels, several insurance companies have started to be more accommodative of premium payment delays and are introducing some flexibilities, including on a case-by-case basis.

Given the current situation, it may be possible to discuss your individual situation with your agent or insurer to see what measures of relief are available.

What if my insurance company suffers financial losses and goes out of business?

This is incredibly unlikely to happen. First of all, we work with established, well-financed Canadian insurance companies who are well-prepared to weather the financial storm this current crisis may have on the Canadian economy. Even those insurers who are not household names have a long history of covering Canadian families through the hardest times in our country’s history and hold billions of dollars in assets. 

Secondly, Canadian regulations require companies to maintain certain levels of capital and surplus to ensure they can pay out the insurance claims for policies they hold. Companies are regularly audited, and provide their financials to a regulator – as well as third-party research institutions such as AM Best.

Thirdly, an independent non-profit organization named Assuris exists for the sole purpose of protecting policyholders in case their insurance company goes out of business. Assuris membership is a legal requirement for every life insurance company in Canada.

In the incredibly rare circumstances that your insurance company fails, your policy will be automatically protected by Assuris. Assuris makes certain your policy is transferred to another company. It also protects at least 85% of your term life insurance death benefit (100% for claims below $200,000) and 100% of your accumulated cash value (up to a limit of $100,000).

Rest assured; the possibility of your insurance provider failing and you losing your policy benefits is extremely unlikely.

Read more about Assuris in our article on the Biggest Life Insurance Companies in Canada