Does Life Insurance Cover Deaths From COVID-19?
The short answer: Yes. But there are a few exceptions.
Thousands of people worldwide have already died from COVID-19, the disease caused by the novel coronavirus. For those who have life insurance, in almost all cases, they are covered and insurance will likely pay out for deaths from COVID-19. There are a few exceptions, according to representatives from life insurance companies and industry organizations.
Traditional life insurance policies, such as whole and term life, likely cover deaths from COVID-19, according to spokespeople from industry research group LIMRA, State Farm and Farmers New World Life (part of Farmers Insurance).
A Few Exceptions
The following are some examples of why an insurer might deny a claim for a coronavirus death if the policyholder.
Submitted an Inaccurate or Incomplete Application
Claims have been denied for reasons like not disclosing travel plans (like if someone travels to a high infection rate part of the world) or lying about weight or income. If the policyholder dies within the first two years of coverage, an insurer generally examines the claim and initial application more thoroughly. Still, a company can refuse to pay a claim if they find false information on the application even after the two-year life insurance contestability period ends.
When filling out an application, take your time, be truthful and ask questions if you do not understand what they are asking.
Did Not Pay the Insurance Premiums
If a policy lapses for nonpayment and the policyholder dies before the policy is reinstated, their beneficiary usually will not receive a payout. When a premium payment is late, life insurance companies often offer a grace period of 30 or 31 days. The coverage will continue as long as the insurer is paid during this time. Insurers may extend this grace period during the coronavirus pandemic — some state regulators are requiring it.
If you are having trouble making payments, contact your insurance company before your premium is late. Otherwise, your insurance coverage will end until you apply for reinstatement and your insurer agrees. To qualify for reinstatement, you may need to prove that you aren’t a risk to insure.
Bought Only an Accidental Death Policy
Accidental death and dismemberment insurance, or AD&D, is designed to cover accidents. It doesn’t pay out if the policyholder dies of illness or disease. Sometimes AD&D coverage is added to a standard life insurance policy as a rider. In that case, the underlying traditional policy would still pay out for a death from COVID-19.
As always, Martin Insurance Agency is here for you during every stage of your family’s life. Give us a call at 717-340-3222 or contact us today to learn more about life insurance and its benefits to your family.
