At the moment, having had COVID-19 isn’t a threat to getting life insurance or a reason to be charged more for a policy. But those breaks will end, possibly soon, and lead to denials of coverage or higher rates for some survivors of the virus.
So say life insurance experts, who also warn that having had the virus will increasingly complicate applying for policies. Insurers will want to know more about the long-term health effects of COVID-19, and will add further information-gathering steps — such as quizzes and medical exams — in order to fill out that picture.
Some potential changes in insuring virus survivors will be delayed until insurers have more information, the experts say. Insurance companies abhor a data vacuum, and tend to proceed more judiciously when they face one, says Morgan Tilleman, a partner at the law firm of Foley & Lardner LLP who handles insurance and reinsurance. “Life insurance underwriting moves more slowly than almost anything else in the economy because there’s sort of a general requirement that the rates and the way they’re made must be supported by actuarial analysis and that’s a high standard.”
That cautious approach is already present when it comes to COVID-19 vaccination status, which isn’t yet being factored into life insurance approvals or premiums, either.
But as the available data grows, experts say, a COVID-19 infection — especially one whose symptoms lingered — could well become a black mark when it comes to getting life insurance. That could lead some companies to be at least cautious about approving certain virus survivors as soon as next spring.
That prospect is a reason to move sooner rather than later if you're considering getting coverage. Here’s what to expect in the coming year or so when it comes to COVID-19 infections and life insurance, and what to do if you plan to shop for a policy soon.
More medical probes of past infections are ahead
While some life insurers have begun to ask about previous COVID-19 infections in their questionnaires to screen prospective customers, not all are doing so. That will change, says Tilleman. He predicts applicants for traditional life insurance will face at least long questionnaires about their COVID-19. The underwriters at every insurer are going to see cases of the virus detailed in those questionnaires, “and if questions aren't being asked yet, they will be.”
And that, in turn, may increase the likelihood that you’ll have to submit to a medical examination to qualify for a policy, say both Tilleman and Paul Ford, CEO of Traffk, an online insurance underwriter and distribution platform.
That could reverse a trend to fewer such exams. Life insurers’ ability to quantify risk, and price policies accordingly, has been enhanced in recent years by the deployment of increasingly sophisticated technological tools that rely on machine learning and predictive algorithms. Those have allowed more life insurance to be approved without need for a full medical work-up, Ford says. However, the unknowns around COVID-19 could change that, he says, at least for certain patients.
“The more things that give insurers cause to kind of be on the fence [and] pull a bunch more of your medical records, the more they may say: if you want coverage you have to be subject to a medical exam,” he says.
Policy denials and price spikes may come for some
For many — even most — life insurance applicants, the extra steps required to explore their experience with COVID-19 will be little more than speed bumps, says Cathy Seifert, an insurance analyst at CFRA Research.
A bout with the virus in an applicant’s medical history — even if severe — won’t bar them from buying life insurance, especially if they’re otherwise young and healthy, Seifert says. That’s because “their overall health risk profile is not likely to have changed materially.”
On the other hand, people who were in otherwise fair or poor health who battled a severe case of COVID-19 could very well find that history will add to their perceived insurability risk. If someone already had underlying comorbidities for COVID-19 such as type 2 diabetes, obesity, high blood pressure or a history of smoking and then contracted the disease, insurers might be more wary about writing a policy.
Conditions like pneumonia or sepsis triggered by severe cases of COVID-19 can cause potentially permanent damage to a person’s respiratory system, according to Panagis Galiatsatos, an expert on lung diseases for the Johns Hopkins Health System. Galiatsatos adds that the immune systems of people with serious cases can be overwhelmed, putting those people at risk for secondary opportunistic infections that can also cause long-term harm to lung function.
The other big X factor is so-called “long COVID.” An estimated nearly 12 million people are afflicted with constellations of symptoms that linger for months and can be debilitating — as well as a potential barrier to obtaining life insurance. “I think that will start to come up,” Ford predicts.
Ford says it’s likely to become more common for insurers to ask not only if you have had COVID-19, but if you have ongoing respiratory illness or breathing difficulty, an irregular heartbeat or other hallmarks of long COVID. Underwriters are likely to be most concerned about the implications of long-term organ damage: COVID-19 is known to injure not only the lungs and heart, but the brain and kidneys.
Tips for COVID-19 survivors shopping for life insurance
Insurance professionals have a few recommendations for COVID-19 survivors who plan to buy life insurance.
Don’t wait: If you’ve weathered a bout of COVID-19 and have been considering life insurance, there’s no time like the present. “If you're having long-run symptoms, you might want to move sooner rather than later on this in terms of shopping for a new policy,” Ford says. "I think we'll probably see some meaningful shifts in insurers' models and methodology next spring." By then, he points out, "we will have had almost two annual cycles of COVID infections" to study.
If data from those cycles suggests people who have had COVID-19 face a greater mortality risk, he says, it could become more expensive or more challenging to buy a life insurance policy.
Tell the truth: One mistake you absolutely should not make, experts warn, is to try to lie about or hide a case of COVID-19 in your medical history. When an insurer accesses your medical records, they will find out about the inaccuracy — and that could trigger a policy cancellation or, if you were to die, a denial of your beneficiaries’ claim, Ford says.
“They're going to go back and say, ‘Well let's pull this guy's medical records and make sure he wasn't fudging,’” he says — and they won’t hesitate to terminate the policy of a customer who didn’t tell the truth, he adds.
Get the jabs: Finally, get fully vaccinated, if you aren’t yet so, and stay up-to-date on any boosters as advised by your doctor and public health authorities. Vaccines remain the single biggest weapon humanity has for preventing COVID-19 from causing severe illness, hospitalizations and death. And resisting them can be financially costly as well.
“Just as a nonsmoker is a lower risk and cheaper to insure, I think consumers should assume that their insurability [will be] enhanced by their vaccination status,” Seifert says.
Tilleman concurs. “I actually think that vaccination status is probably the thing that life insurers, if they’re not already looking at, are most likely to look at,” he says. “There’s pretty clear evidence about the positive impact of vaccination, even for people who ultimately do get a breakout case of COVID.”