5 Ways COVID-19 is Changing Life Insurance
The impact families, communities, and economies are experiencing due to the COVID-19 pandemic is profound. Life insurance has always been relevant for those with financial dependents, but the value it provides is coming into sharper focus, as life insurance policies may protect people’s loved ones’ future financial security.
Whether you already have a policy in place or are considering purchasing one, COVID-19 is changing the life insurance industry. Here are five ways it is most impacted.
1. Life Insurance Is Top of Mind
During these uncertain times, many Americans are concerned about what the future holds for them and their loved ones. With so many unknowns, people want to protect their family’s financial well-being.
It comes as no surprise that as COVID-19 continues to spread globally, life insurance companies have reported seeing a substantial increase in applications.
Since life insurance provides financial protection for your loved ones in the event of your unexpected passing, a policy may seem like a remedy to reduce fear and anxiety about your family’s financial future.
However, it’s important to ask: Is the COVID-19 pandemic reason enough to purchase a life insurance policy?
Liam Monaghan, Chief Actuary at life insurance company Ladder, states, “Ladder holds steady in their view that life insurance is necessary for anyone with financial dependents.”
So, if your family relies on your income in any way or you have financial obligations that must be addressed in the event of your passing, it may be wise to consider a life insurance policy.
2. A Fast, Easy, Online Application Is Essential
With the current shelter-in-place orders, many are juggling multiple things such as work, parenting, playing the role of teacher, managing (and worrying) about their own health and that of their family, and just trying to maintain overall sanity. While it may seem as though people now have an abundance of free time, that is simply not the case for everyone.
That said, there is no time for a lengthy life insurance application process with decisions that can take weeks or even months. Additionally, since people can’t leave their homes, it’s not possible to meet with insurance intermediaries and parameds (people that administer the lab tests) in person, nor do people want to spend hours on the phone. Due to this concern, many companies are expanding their automated underwriting processes .
Working with insurance companies that have a fast and easy online process can help streamline and simplify the entire procedure.
3. There’s a Need for Affordable Flexible Coverage
In March 2020, the unemployment rate rose by 0.9% to 4.4% . This was the largest month-over-month increase in the unemployment rate since January 1975, when the increase was also 0.9%. Not only is the unemployment rate on the rise, but the financial markets are facing extreme volatility.
The majority of consumers are more cautious than ever when it comes to spending their money. That means they are looking for affordable life insurance premiums that won’t break the bank. Finding a life insurance company that can meet your needs while fitting your budget is worth considering.
4. Customer Service Matters More than Ever
Life insurance can be a confusing and intimidating topic. So when questions arise, consumers will want to easily access the answers they’re seeking, or to reach a customer support team member. With everything consumers are juggling, they don’t want to waste time searching.
When it comes to protecting your family, it’s important to find the policy most suitable for your needs. Working with a company that’s easily accessible and can answer questions quickly may help put you at ease.
5. Reliability Matters
COVID-19 has changed the way people interact and build relationships with one another. Although people aren’t seeing their friends and family in person, they are connecting virtually to check on their loved ones.
Now more than ever, consumers want to work with companies that are reliable and help throughout the entire life insurance journey. Consumers want to work with an insurer they can count on.
Ready to Consider Your Life Insurance Options?
Due to the current pandemic, it’s not surprising that many Americans wonder if they need life insurance. While some might be more motivated due to COVID-19 to buy a life insurance policy, the pandemic doesn’t change whether or not you need coverage.
Monaghan also suggests, “Anyone who provides care or financial support to other people should think about whether they have enough life insurance to keep that support going for as long as it might be needed.”
Applying for Coverage
If you currently have a life insurance policy and pass away from COVID-19, your life insurance policy should still provide a payout according to the policy’s terms as long as the application was filled out honestly.
If you’re looking to purchase a new policy, be aware that some insurance companies may have a hard time processing applications at the moment because they rely heavily on manual processes for underwriting like obtaining blood samples and in-person medical exams.
Monaghan states, “Some companies are able to automate many of those processes and are having less trouble processing applications.”
It’s important to note that as a result of COVID-19, underwriting guidelines are evolving, but some companies are uniquely positioned to handle those challenges due to their technology and data-driven approach.
If you are looking for a fast and easy way to make sure your loved ones are protected financially, you might want to look into SoFi’s life insurance benefit through Ladder. SoFi members can apply for coverage in minutes and get an instant decision. While we can’t control what our future holds, we can make sure our life insurance policy fits our needs and the needs of our families during this difficult time.
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