Will COVID-19 Change Life Insurance Forever?

Ever thought of taking out life insurance? Covid-19 might take that choice away from you.  

 Think of insurance companies as bookmakers or casinos; they very rarely lose. And insurance companies work on the same concept, economies of scale.

They take a little bit from all these people here to pay out to the few there, and the difference, well that’s profit. Obviously there’s re-insurance which is then sold on but let’s not worry about that. In its most simple form, insurance companies like stats, they like numbers, and they like averages.  

So what is Covid-19 going to do to the life insurance industry? Because those stats are changing daily. And getting worse.  

Putting a mortality rate on the coronavirus is all but impossible and will be for quite some time, numbers of mild cases are gonna be hugely underreported because people with a cough and a bit of temperature are told to self isolate and not seek medical attention to risk spreading it, and a lot of cases are a-symptomatic: which means you may have it but you don’t even know.  

But what other problems could this cause for life insurance companies?

It’s normal practice for life insurance companies to request information from your doctors, which is notoriously slow at the best of times, imagine what that’s gonna be like now.

I already know of 2 insurers who have also brought in an additional Covid-19 questionnaire. Questions like: "have you got any symptoms?" or "have you been to any of these high risk places in the past month?"

I believe this is going to become normal practice, and that they’ll also bring in expected travel, I don’t think will cover you if you intend to go anywhere near high risk areas, and what each insurer teams as high risk I’m sure will differ.  

And what if you’ve had it? What then? Do they not insure you? Or do they say, re-apply after X number of days, weeks, months? 

And what if you need a medical? Depending where you’re wanting to go and what you need doing this can sometimes be a couple of weeks before you get an appointment anyway. This will obviously now take a lot longer, that's if you can get booked in at all.  

Long story short, if it’s something you’ve been thinking about, pull your finger out and get on with it, because we don’t know what restrictions or changes are going to come in and we don’t know if it’s going to be a lot more expensive soon either.

Thanks for reading,