A few recent news stories highlighted concerns that life insurers are adjusting their policy application processes due to COVID-19.
Naturally, the pandemic and the resulting economic downturn have heightened many people’s concerns about the availability of coverage. But agents and other financial professionals are eager to offer assistance. And delays in the application process don’t mean a rejection.
In fact, amid all the uncertainty these days, life insurers’ commitment to financially protecting as many families, individuals and small businesses as possible is as solid as ever.
The prudent actions taken to make lifetime guarantees to consumers reflect this commitment.
When reviewing life insurance applications, insurers have an obligation to assess significant threats to individuals and society – including pandemics. Insurers are legally required to make underwriting decisions based on “sound actuarial principles” – a term that essentially means fundamental insurance tenets. Arbitrary decisions are prohibited by state regulations to protect consumers.
It’s also a matter of fairness and responsibility. When a significant public health crisis arises, life insurers need to consider its potential impact on all those applying for coverage. This helps ensure premiums are set properly, and that insurers will have the funds available to pay all future claims.
Life insurers typically consider a variety of factors that impact life expectancy. An applicant’s age, sex, health, smoking status, lifestyle, and family health history are common. Life insurers conduct holistic evaluations, where these factors and possibly others are considered before any decision is made.
The pandemic has interrupted many traditional underwriting processes. Pre-pandemic, life insurers relied heavily on applicants’ bodily fluids. These days, life insurers are relying more heavily on medical records. It is proving a safer way to obtain essential information and make sure people can receive the financial protection they want and need.
Even though COVID-19 has created unprecedented conditions throughout our economy and society, life insurance coverage is widely available and the protection it provides is as certain as ever.
Jack Dolan is Vice President, Public Affairs at the American Council of Life Insurers (ACLI). A former journalist and Capitol Hill aide, he joined ACLI in 1991. He has represented ACLI in print, broadcast and online news outlets on a wide range of financial and retirement security issues facing American families.
