As of this morning, just over 17 million Americans have tested positive for COVID-19.¹ There are many unknowns regarding long-term effects; however, there is some evidence and a lot of speculation regarding potential future effects, such as permanent heart, kidney, or lung damage.²
Life insurers typically make underwriting decisions according to a standard set of guidelines that document the well-known effects on mortality for almost any condition you can think of. But the long-term effects of COVID-19 are still unclear and the guides have not yet been updated; as a result, insurance companies are being forced to figure it out on the fly.
I spoke to Tiffany Hyde, Chief Underwriter at Lion Street, an independent member-owned firm that helps facilitate obtaining life insurance for many of the country’s top insurance advisors. She shared her insight and offered some guidance for what someone who has recovered from COVID might expect — at least as it stands today — when applying for life insurance:
Ari Fischman: If someone was asymptomatic or had mild symptoms with no lingering effects, what can they expect?
Tiffany Hyde: If their recovery has been at least 3 months, then this should not affect their insurability.
Ari: How about if they were symptomatic but never hospitalized?
Tiffany: They would need to have recovered for 3–6 months with no residual symptoms and have a follow-up with their doctor confirming they’re back to baseline health. Depending on their underlying medical health and how COVID impacted their system, insurance companies may require the doctor to run additional pulmonary or cardiac testing along with blood work to ensure full recovery from COVID. If the testing is all negative, their insurability will only depend on their baseline medical health.
Ari: How about if someone recovered from COVID after a brief hospital stay?
Tiffany: If they were put on a ventilator, insurance companies will want to wait up to one year from the point at which they recovered. There are still so many unknown secondary complications for COVID patients who required ventilation or lengthy hospitalization. We’re looking at each client’s medical file to determine the length of time needed before they will become insurable.
This dynamic environment can change quickly. If you are one of the 17 million Americans who contracted COVID-19 and recovered, it can be helpful to speak with an independent insurance advisor who can help you navigate the ever-changing underwriting environment.
Life insurance is the best resource to protect families from the unexpected loss of a loved one, but it is also becoming increasingly important as a planning vehicle, helping high-earning or high net worth families protect against potential income tax increases or future changes to estate tax exemptions.
COVID is a sobering reminder that no matter how well we take care of ourselves, we cannot control everything. If you are healthy, there is no better time than now to lock in that health for future insurability — an unexpected illness can occur at any given moment, and once that happens, your insurability is forever changed. I learned that lesson the hard way when, at the age of 24, I was diagnosed with Type 1 Diabetes. I paid attention to my health, was physically active, maintained a healthy weight, and did not smoke, but it wasn’t enough. Thankfully, I had obtained some insurance coverage before my diagnosis, and my health rating qualified me for the best rates; however, after the diagnosis, my policies were significantly more expensive than those of my peers.
I learned early in my career that one of the best planning mottos you can have is “Plan for the best, but prepare for the worst.” Adopting that mindset allows you to stay ahead of the game and avoid being taken by surprise. If you are under age 65 and in good health, you may be able to obtain up to $5 million of any type of life insurance without a medical exam. Life insurance is about protecting your loved ones, and term insurance can even allow you to do so inexpensively. Take advantage of your good health while you have it and consider locking in a favorable rate on your insurance. Otherwise, by the time you need it, it could be too late.
Stay healthy, protected, and happy.