A pandemic is an occurrence of an infectious, widespread disease that has spread across vast regions (worst-case scenario: world-wide) that affects a large number of people. The most notable pandemics in the history of the world include the “Black Death” in the 14th century, the Spanish Flu in 1918, and the 2009 H1N1 Flu pandemic, which killed people by the millions. A more recent scourge that the world is experiencing is the 2019 CoronaVirus pandemic and the proliferation of HIV/AIDS.
So the question lies, can life insurance cover the deaths caused by pandemics?
People with existing life insurance policy
Death caused by health-related issues is covered by life insurance. If the individual who died is a policyholder, then its beneficiaries can take hold of the death benefits once they filed a valid insurance claim. A death benefit is the amount of money paid by the insurance company to the beneficiaries upon the death of the insured person. There are insurance policies that have certain prohibitions for specific causes of death. But in general, in cases of pandemics, like the 2019 CoronaVirus disease, recipients of existing policyholders can receive death benefits.
How about those who thought of getting their policy during the pandemic?
If you are planning or have already decided to get a life insurance policy only during the period of a global crisis, things are going to be very different. Bear in mind that insurers determine the premiums of a policy based on a person’s health and medical history. Insurers can either hold or reject your policy, depending on your situation.
Why would insurers reject an insurance application?
Remember, this is a period where a person can get infected even without knowing it, so the risks can be very high. Here are the two options for that case: (1) you would have to disclose your whole medical history to the insurer and get a full medical checkup yourself. If you happen to pass the medical exam, the insurer will still make you pay higher premiums. Or, (2) you will get rejected to save everybody the hassles and risk of infection.
Always remember that once a policy is accepted, given the terms and regulations, whatever happens to you, you will be receiving the same benefit as the existing policyholders. In the case of a pandemic, every move made has very high risks involved; that’s why there are very few cases where policies are approved in situations like this.
At Berlin & Denys Insurance, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (800) 946-3303. You can also request a free quote by CLICKING HERE.