disability insurance covid-19

COVID-19 is Making Life and Disability Insurance Underwriting Easier

Have you been putting off obtaining disability insurance or life insurance (or both) due to the process involved, especially medical underwriting? If so, this summer may be the right time to secure coverage. COVID-19 has made the underwriting process a little easier for certain individuals. 

It’s true that the process of applying for life insurance and disability insurance can be cumbersome. There are a number of steps, including completing a detailed application that outlines your medical history, conducting a phone interview with the insurance carrier, and undergoing the medical underwriting process.

But due to COVID-19, customers are currently uneasy with someone entering their home to conduct the lab work that is usually necessary for medical underwriting, especially if that person has been in other homes as well. Carriers have been updating the process accordingly to ensure that they can continue to insure people. Some carriers are eliminating one or more steps in these processes, which makes now a great time to get your necessary insurances in place. 

Getting Life Insurance During COVID-19

Certain life insurance carriers are currently offering policies up to certain amounts, usually $500,000, without lab work, as long as the applicant is under a certain age. 

Other companies may consider issuing life insurance policies of up to $1 million with no lab work based on a phone interview. If underwriters conduct a favorable review of available data, like motor vehicle records and prescription databases, then there is a good chance they may make an offer with no lab work required. 

I’ve also seen a carrier expand this provision, offering life insurance policies of up to $2.5 million to customers ages 40 and under and $2 million for customers between 41 and 50, as long as the client has had lab work and a visit to a doctor at least once in the last 24 months. 

None of these are guarantees, but if you have been meaning to purchase life insurance, now may be a good time to do so. Life insurance is an important part of planning for your family’s future because it can replace lost income after your death, allowing your family to continue to meet their obligations should something tragic happen. 

Work with an insurance broker or spend some time researching the nuances of life insurance policies., Focus on understanding exactly what kind of coverage you do and don’t need. This episode of Money Checkup with Mark Maurer may be a good place to start. 

Getting Disability Insurance During COVID-19  

Most disability insurance providers will consider policies of $10,000 per month without lab work. Others offer “simplified issues” of $5,000 or $6,000 per month without lab work — similar to what insurers have done for many years, just expanded. 

If you are a physician in training, you can likely get disability coverage that provides $5,000 per month in benefits without any lab work at any time. 

If you’re preparing to finish training, take note — it is almost always cheaper to get a disability insurance policy as a resident or fellow rather than an attending physician. Most carriers offer a new-in-practice policy, which allows you to obtain a policy during training without proof of income. Don’t wait to apply for coverage. 

When purchasing disability coverage, make sure to look for an own-occupation or specialty-specific policy. These provisions mean that, if you can no longer do the work you currently do, you will be considered totally disabled, regardless of whether or not you can be gainfully employed in another occupation.

Make sure to understand the riders that may be included in the policy, such as partial or residual benefit riders, future increase options, cost-of-living adjustments and more. For a comprehensive outline of what to look for in your disability insurance policy, read my past blog post on the subject or this episode of Money Checkup with Stephanie Pearson, M.D

Work With Your Insurance Agent to Choose a Carrier

Not everyone will be eligible for the accelerated underwriting available to some customers now. If you have pre-existing conditions, for example, your underwriter may still insist on lab work. A good insurance agent can talk to your underwriter about your situation and see which carrier is a good fit for your needs.

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