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Should Utah residents worry about COVID-19 and life insurance?

With COVID-19 being the only topic on the news cycle for over the last 7 months getting more life insurance coverage is probably on your mind. The state of Utah has returned to its highly restrictive COVID-19 restrictions to prevent infection. We all have different levels of worry about this issue. Our primary advice is a situation like this is not panic no matter how much the media has hyped up the current situation. However, according to the Wall Street Journal, those that are dying from COVID are the least likely to own life insurance.
Utah COVID-19 infections
Utah COVID-19 Infections as of 28 October 2020. Source Google and the New York Times

As you can tell from the graphic above infections are indeed at an all-time high in Utah. The second chart however is positive because it shows that deaths from COVID-19 are not tracking with the infection rate. As of 28 October 2020, there are 107,000 people infected, and only 579 deaths which is lower than half a percent of people who have contracted it have died. This does not even take into account COVID-19 antibody studies that show that maybe 5 times as many of us already have had the coronavirus.

Utah COVID-19 Deaths
Utah COVID-19 Deaths as of 28 October 2020. Source Google and the New York Times
Will my existing life insurance policy still cover me if I become infect with COVID-19?

We have had no information from any carrier that current claims for life insurance would or should be denied due to COVID-19 infections. Insurers are unable to alter current policies that have already been sold and are unable to deny your beneficiary should you die from it. We would like of course remind you it is important to be accurate with your life insurance application and pay your premiums. If you have issues paying your premiums due to job loss it is best to get in touch with your life insurance carrier now to see what type of arrangements can be made. Check with your carrier what type of reinstatement policy they might have.

Are there delays is getting life insurance now?

The good news is the delay companies were having in the beginning pandemic are slimmed down some. We have partnered with Ethos Life Insurance and most of their policies do not require a medical exam. Ethos has also stated that it’s important to be truthful about past and future travel plans. They have also stated that life insurance rates are not being impacted during the pandemic. That means that actuaries have longevity priced in. We also have many other companies through our multi-carrier life insurance quoting tool too that do not require physical exams for a few dollars more a month.

Could being infected with COVID-19 affect my policy qualification or rates in the futures?

Most people that have COVID are being told to wait until they are well to apply for life insurance. Though no information has come out yet it might be a health question for underwriting in the future. We have heard of purchasers of life insurance even getting approved for life insurance while being positive for the coronavirus.

If I do raise my insurance levels throughout this infection period what and how much should I raise?

We would advise a 5-year policy to layer your coverage through this time period. This is the one time you might want, to maximize your coverage. We believe that purchasing a short term life insurance contract (5 years) for a short time period to get you through the pandemic and additional social unrest for a large amount is probably the best life insurance product to purchase. However, on a short contract, it might actually be one of the rare times you might want to do a Return of Premium Rider and get all that money back at the end of the term. Ask us or your insurance advisor for a quote with and without the Return of Premium rider.

What about other types of coverage for life insurance coverage should I focus on during the COVID-19 pandemic?

Though whole life and indexed universal life insurance can make wonder supplements to your estate and retirement at this time a term life coverage should be enough to get you through to the end of the pandemic.

Should you worry speaking historically about COVID-19?

Both the Spanish flu of 1918 and the Hong Kong flu of 1968 had 2 waves. Yes, the second wave statistically was worse than the first the good news is you did not hear about either of those viruses for a third or fourth wave. Whatever your personal case we don’t recommend “panic buying” life insurance. CNBC mentions that purchases have increased during this time period. However, increasing coverage through an uncertain time could be a good idea.

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