Interest in purchasing life insurance has increased amid the COVID-19 pandemic, but most providers are not approving policies for those who’ve recently recovered from COVID-19, a financial adviser said. Meanwhile, existing clients should be covered if they were to die from the virus as long as they didn’t have a pre-existing condition for COVID.
Josh Montanez, financial adviser with Northwestern Mutual Wealth Management Co. and Montanez Financial in Fayetteville, said life insurance is becoming more relevant amid the pandemic as people start to have more serious conversations about it.
“A lot of people have that ‘invincibility’ feel until something happens,” he said. “And for a lot of people who’ve never had a life scare, [they] are having their first life scare this year.”
A recent PwC survey shows 15% of respondents said they were likely to purchase life insurance because of the impact of COVID-19.
But for those with COVID or who have recently recovered from it, the majority of the life insurance industry is asking them to wait. This waiting period might be a month after recovery or 12 months depending on the policy and the company with which they are applying for life insurance, Montanez said.
“Most insurance companies are not approving people who recently recovered from COVID because it is too early to know the ongoing health concerns COVID could give people,” he noted.
However, policyholders without a pre-existing condition for COVID should be covered “because it’s just like any other illness or injury that wasn’t planned for,” he said.
In the pandemic, providers have looked to approve prospective policyholders based on their medical history and without a urinalysis, blood sample or physical exam.
“They are trying to make it as socially distant as possible [and] make it as easy as possible for people to get life insurance,” said Montanez, adding that this is likely one of the least intrusive times to purchase life insurance for those who are considering it.