During a crisis as such we are enduring, many people are wondering what their life insurance options are. Covid 19 has wreaked havoc across almost every type of business in the world.
Luckily, most life insurance companies are still open for business. However, many companies are making changes to the way they’ll do business, and who they will offer a policy to.
It seems that about every day, another company has made changes to their offerings, and products. Depending on the amount of life insurance a person would want to purchase, a medical exam is usually going to be required. Certain life insurance companies are falling back on contingency plans.
“About 1 times per day, if not more, we are getting an email from a carrier advising us of product exclusions, and possible reduction in amount of life insurance they will approve,” says Carl Babers of Diabetes 365, a national online life insurance agency. “One day you can be approved by company ABC and then the next they won’t offer to you any longer due to the changes in their underwriting criteria.”
While shopping for life insurance in today’s world, you have to have a little sense of urgency. Some life insurance companies are essentially shutting the door on certain people.
“One major trend we are seeing is companies lowering the maximum table ratings they’ll offer a policy. For people with Diabetes, especially type 1 diabetes, companies are making it seem that they just don’t want to work with them, nor offer them coverage. What is extremely frustrating is that companies aren’t honoring pending cases. One minute they meet underwriting qualifications, and then the next minute they don’t. Since most people who have a form of diabetes fall into these higher underwriting classifications, they are having fewer companies to choose from” says Matt Schmidt of Diabetes Life Solutions.
Let’s look at some of the trends major life insurance carriers are making.
Prudential, recently announced they will no longer offer a 30 year term policy, which is one of the most popular term lengths. Midland National has decided to only offer coverage to people who fit a Table F or better underwriting classification. AIG has taken this ever further, and won’t consider people who are a risk greater than Table D. Nassau Re has also decided to stop offering policies to higher risk individuals, and have capped their policy at a Table E insurance rating.
Other companies like Transamerica, and Penn Mutual have halted sales on applications for people age 70 or higher. Mutual of Omaha has also altered their offerings to the senior population.
“Every day we are getting calls from seniors asking if they may still qualify for life insurance. Often times these people just want a policy to pay for funeral and final expenses. Luckily there are still quite a few options, in terms of life insurance providers. But not as many to choose from say 14 days ago.” mentions Jason Carl of Burial Insurance Pro.
Life insurance companies hope that business can return to normal anywhere from 30 to 120 days. But nothing is 100% certain.
Enter Non-Medical Exam Policies
One unintended trend that certain life insurance carriers are considering are a non-medical exam policy. At this point, they really do not have a choice. Most consumers do not want an examiner, who’s been in five other homes to come into their house and collect a blood and urine sample.
In the past, an insurance company would only offer $500,000 on a non-medical basis. Due to necessity, a person may qualify for $1,000,000 to $5,000,000 without undergoing an exam.
Even in a time of crisis, there really can’t be any excuses made to not be able to obtain a life insurance policy. People do have options. It’s generally best to speak with an agent, and have them assist you in finding the best type of policy.
