There’s a great deal of global and national concern about the Coronavirus, COVID-19. The Coronavirus is greatly impacting the life insurance industry. If you need immediate assistance or have questions, call us at (928) 323-0933 or schedule a phone appointment with us HERE.
This article is about how the Coronavirus is impacting the life insurance industry in 2020, and how COVID-19 will likely impact you and the life insurance industry, throughout the next several years. The goal of this article is NOT to increase fear- as there is already plenty of that. The goal is simply to educate.
To further clarify, this is NOT about the current status of the Coronavirus and not about speculation about the virus, in general.
Article Table of Contents
Coronavirus Impact On Life Insurance Companies & Agencies
Globally, many life insurance companies are getting hit hard. As of 3/12/2020, the direct impact within the United States is relatively minimal. However, we are already seeing a shift toward preventative measures that will cause efficiency and productivity problems, in the short and long term.
Many of the life insurance companies are minimizing staffing and eliminating on-site employment, to minimize exposure to the Coronavirus. In addition, life insurance agencies are also slowing down. Many are stopping house visits to minimize contact and spread of the virus. They are waiting to see what Coronavirus numbers are going to be. On the other hand, we at Protect With Insurance are committied to functioning at 100%, no matter what happens. To protect exposure to our clients, we are keeping all communication and assistance, telephonic, until the spread of COVID-19 has reduced. We have been primarily assisting clients, telephonically, for some time- so it’s largely business as usual.
COVID-19 Life Insurance Protection
The following, address many of the concerned questions we have been receiving, as well as some Life Insurance related speculation:
1) Many (Not all) life insurance policies will pay 100% coverage due to Coronavirus death or related deaths. All of OUR full coverage life insurance policies, pay 100% for Coronavirus and related deaths. Also, 9 out of 10 times our full coverage policies are going to be less expensive than the competition, due to our shopping algorithm that we utilize.
To confirm if your policy pays 100% for COVID-19 and related deaths, carefully read your policy. Feel free to call us to help you assess your current coverage. As always, confirm the length of time you are still protected in your policy. Often times, clients think they have whole life permanent coverage. When in fact they have a term policy that will expire, or become unsustainably expensive (Often it is 7 – 12 X more expensive at the end of the life insurance term), in order to continue the policy at the end of the term. If you are interested in term life insurance, get more information, HERE.
To get an instant quote with a Life Insurance provider that offers FULL coverage, including COVID-19 related deaths , CLICK HERE.
2) Most life insurance policies will NOT pay income or other benefits if you lose work due to the Coronavirus. However, some policies are designed for this very purpose. So that’s going to be an exception.
3) Some life insurance policies require the insurance company to pay your life insurance premium if you lose work. This will likely come in handy in 2020. Therefore, it’s good to know if you have this protection in your policy, because it can save you a lot of money and it’s not anything you have to pay back to the insurance company. If you have that rider built into your life insurance policy, they pay your premium until you can get back to work. During this period, it is just like you hace been paying it. There is nothing that’s owed back at any time.
4) We are likely going to see smaller life insurance programs that are going to be heavily marketed, especially on television, radio and billboards. Thes new plans will offer supplemental Coronavirus death and disability coverage. Most likely, these policies are, probably not going to be a very wise way to go. The marketing will lean heavily upon fear tactics to promote them. We will probably be better off with well priced full coverage policies that cover every kind of death (except suicide or complications from intentionally self inflicted wounds). Bear in mind, you can hold these life insurance policies, temporarily or long-term. Meaning, you can just have the policy for a few months or so. Or you can have a life insurance policy for 10 – 30 years, or the rest of your life, depending on what your particular needs are.
Outside the United States, we’re seeing huge losses within the life insurance industry. These life insurance providers are getting hammered by billions of dollars of claims that they weren’t expecting There job is to pay these claims. The problem, is, they only have so much money and they are heavily in the red. This can eventually lead to problems for you, and potentially your loved ones- if these companies providing your life insurance go bankrupt. The expectation is that, soon, these problems will be domestic, as well.
Life Insurance Prices
To balance the higher volume of life insurance claims, for many providers, prices have already increased. Many of the others are warning of price increases for NEW applications. This distinction of new policies, is extremely important. When you get life insurance, your contract is locked for the duration of the policy. Therefore, once you get your policy, your price is locked into a price schedule. If you already have insurance, your price will not increase, unless it is part of your contract and scheduled pricing. Only NEW policies, not yet submitted, will be effected by prices, at the time of submission. So, if you have not locked in your health and your price, get a quote HERE. Or call us at (928) 323-0933
How Can We Insulate Ourselves From Corporate Life Insurance Problems?
One of the simplest ways to protect ourselves from corporate snafus, is confirm that your life insurance provider is A rated. This is a professional, important rating. It’s not a review. These ratings are provided by unaffiliated 3rd parties, such as A.M. Best, Moody’s and S&P Global, to name a few. The rating is a condensed statement of financial solvency. Therefore, a high rating is additional security for your life insurance policy. And most importantly for your loved ones who are eventually going to receive the death benefit. You can easily reasearch a life insurance company’s rating, Online.
Unfortunately, over the next year, and likely the next 5 years, the economic impact, is going to be pretty hot and heavy, from the Coronavirus. The impact will not likely come from the deaths. More likely, the impact will result from lack of spending and lack of earning, which accompanies problems, such as these. So, you need to make sure that your life insurance company is stable, and the high rating helps to ensure this. Also, if possible, you want your life insurance provider to be one of the larger companies. The reason for this, is, IF your company goes bankrupt, they are more likely to get what’s called a bailout. Very likely, we will start seeing a lot of bailouts this year, and continued over the next 1-2 years.
The Life Insurance “State Guarantee Fund
If your life insurance provider is 100% properly licensed to sell life insurance within your state AND if that life insurance company goes bankrupt, you also have protection in place, called the “State Guarantee Fund”. Regarding this fund- many websites and organizations spin a tale that this amazing fund magically gives you 100% protection, in the event of bankruptcy.
It IS a helpful safety net, and in Arizona, pays up to $300,000 death benefit on a case-by-case basis. But there’s no guarantee that there’ll be enough money within the fund if a company goes bankrupt. It is an extra layer of protection. It is similar to the protection the FDIC offers to banks. Sometimes it saves banks, sometimes it does not. In probably should be called the “State Try Real Hard Fund”.
The bottom line, is just like the FDIC does for banking, the State Guarantee Fund gives consumers confidence in the industry, so you take action to do what you probably should do in the first place- put a life insurance policy in place so your loved ones receive a juicy check, when you die.
An example of a large, high rated company worth partnering with…
A great example of a solid life insurance company is Mutual of Omaha. They’re a great company to get a life insurance policy with, because they not only are very high rated, but they are backed by a strong network of investors. They’re in great financial shape. They’ve been in business a long time.
So How Do You Protect Yourself?
Here are a couple of easy steps.
1) Confirm your life insurance company is A- rated or better.
You can simply search this, Online. As an example, using Google, search for “Mutual of Omaha life insurance rating”. Skip any reviews you see. The magical working is “Rating”. Reviews are worthless. You’re gonna want to see an actual professional rating from companies like A.M. Best, Moody’s and S&P Global. Rating life insurance companies, is what they do, and their ratings carry a lot of weight.
Again, a large A rated company is even better than just an A rated one.
2) Confirm your life insurance policy insures FULL coverage.
For FULL coverage life insurance (including payout for Coronavirus-related deaths) CLICK HERE.
This means 100% medical and 100% accidental coverage with no exclusions for biological hazards, such as Coronavirus. Carefully read your policy, or you can just call your life insurance provider. They are required by law to be 100% honest with you about exactly how your policy works and what is covered.
To summarize, For many reasons, it’s likely going to be a tough year and we need to protect ourselves on the life insurance front. Take simple precautions, so you know you and your loved ones are covered.
Make sure you have sufficient life insurance coverage with a financially sound, well established company.
If we can help with any questions or concerns, call us. While you have us on the phone, quickly confirm you have 100% COVID-19 protection and at the best price you can get. Or, have us contact you by filling out our contact form, HERE.
…And keep your loved ones safe and secure.
This article was written by Chad McMahan, the CEO of Protect With Insurance.