Surviving COVID-19: Fearing Life Insurance Rejection
Whether it’s a declined college application, an unreciprocated right swipe, or a denied life insurance application, rejection is never easy. While we can’t help with the first two scenarios, there are some answers if you’re facing rejection on your insurance application.
Millions of people who survived COVID-19 are expected to be dealing with medical issues including heart, kidney, and lung damage long after the pandemic subsides. But the long-term effects on mortality are unknown, even for those who had mild or asymptomatic cases. That left life insurance companies without the risk data they typically rely on in deciding who to cover, meaning survivors could have a harder time getting coverage or have to pay more.
In 2021, as the virus was taking hold, many life insurers stopped issuing policies to people over a certain age and those with pre-existing conditions. Some companies stopped offering temporary coverage, which provides coverage during the underwriting process, and a number of companies actually refused to issue policies to individuals who survived COVID-19.
During underwriting, life insurance companies look at many different factors. The insurer will want to get a picture of the risk you pose, which means looking at your hobbies, family history, and health. It’s of the utmost importance, to be honest on your application even if you have poor health or a risky hobby. If you lie about your positive result in COVID-19, the insurance company can deny your application outright or increase your premiums later if they discover you withheld information. Here are some of the steps you can take in case life insurance rejects your application.
Step one: Talk to your broker
If your life insurance application is declined, the first thing you do is talk to your life insurance agent or broker, in cases where they don’t contact you first. The insurers will usually say why your application was declined. Your broker can work with you to analyze the decision and strategize what to do next.
Step two: Show them your medical reports that you survived COVID-19
Sometimes, insurance companies won’t reject your application outright and instead will postpone your application to another date, usually six months to a year later. If, for example, you have been positive to COVID-19, the insurer typically will allow a full year to pass and allow your body to adjust to any new medications or symptoms and then check back with you to verify stability.
Step three: Explore alternative life insurance products
If a life insurance company deems you to be a high risk you may still be able to get insured by purchasing an alternative form of life insurance. These are no exam life insurance policies, but they may offer lower coverage.
One coverage you can opt for is guaranteed-issue life insurance, this insurance skips underwriting entirely. That means no medical exam or review of your medical records. You’ll still be asked about your health, and misrepresenting yourself will have the same consequences as it does for other life insurance policies.
Make sure to scout for other companies. This is the best way to see if there is something out there that can provide better coverage for you. Scouting will help you compare the prices and coverage.
