Consumer FAQ: Will Life Insurance Cover a Pandemic-Related Death?

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Press Release

Thousands of people from across the board are dying every single day. In these unsettling times, Novel Coronavirus is the one to blame. Now, the question rises among consumers, “Does life insurance cover the death of policyholders due to COVID-19?”. 

Well, yes and (maybe) no. Traditional policies such as Term and Whole Life are likely to cover deaths that are brought about by a pandemic illness. 

However, there are a few potential exceptions to this. For example:  

Inaccurate and Incomplete Application

A global health crisis may have a huge impact on life insurance acceptance and qualification to claims, especially to those who are currently in the application process stage. An insurer might deny a claim if false info is found on your application. Let’s say you are not disclosing your travel plans and history or you are lying about your health and income status. To avoid this kind of scenario, make sure to fill out an application as truthful as possible. Do not forget to ask for help if there are questions that are not clearly stated to you.       

Unpaid Premiums

Apparently, insurers will refuse to pay out claims if there are unsettled premium payments on the policy. Failure to pay your premiums within the given grace period of 30 to 31 days will technically end the policy coverage, causing your beneficiaries to receive nothing if you die. If you are having difficulties in making a payment during the coronavirus pandemic, inform your provider immediately. Some state regulators are requiring the insurers to extend the late payment grace period during this trying time.  

Special Policies

Not all policies can guarantee a payout for COVID-19 death cases. A great example to this is an Accidental Death policy or AD&D. This special type of life insurance policy is basically designed to cover accidents alone. Meaning to say, it will not release an assured sum of death benefit if you happen to die from an illness or a pandemic. 

If this answers the key question and it turns out you are eligible to receive a payout from a passing family member, the next step is to file a life insurance claim. 

Here’s what to do:

  • Contact the insurance provider to report the policyholder’s death due to COVID-19 pandemic. The insurer will then instruct you on the succeeding steps and provide you with claim paperwork.  
  • They will likely ask for death certificates; so, make sure to obtain several copies. 
  • When filling out a claim form, make sure to input accurate and complete information. 
  • Send in all the necessary documents including claim paperwork and death certificate. Once the insurer has received and reviewed the requirements, they will let you decide whether to receive the death benefit in a lump sum or installments.   

In some cases wherein the life insurance policy is obtained from an employer, the beneficiary will have to wait for the employer to work on the payout. You can also perform the process steps above if you know the name of the insurance provider.  

Bonus Answer:

For individuals who are planning to buy a policy, know that you can still apply for term life coverage during the height of COVID-19 pandemic. However, getting approved may require you to take a medical exam. Because of the limitations in the availability of medical exams during this trying time, applicants might have to wait for 3 to 4 months to complete the test. Since the underwriting guidelines of insurers are changing as a result of the ongoing pandemic, make sure to send your inquiries prior to pursuing your application.

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