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By Paul Reynolds
September 13, 2021
An umbrella on its side (green to represent the cost of the insurance) and its shadow is the shape of an unused vaccine.
Kiersten Essenpreis for Money

People who choose not to get vaccinated for COVID-19 are far more likely to die from the virus. But that reality won't -- at least yet -- hurt their chances of being approved for a life insurance policy, or affect the premiums they pay.

That puts life insurance on a different foot than company-supplied health insurance, at least as offered by some employers. Delta Airlines grabbed headlines last month by announcing it would impose a $200-a-month surcharge on employees who refuse to get vaccinated against COVID-19. The company said the revenue would be used to offset the company’s costs for medical treatment and sick time from unvaccinated workers.

Experts expect more employers to weigh imposing such healthcare surcharges as “vaccine hesitancy” persists and the cost of treating resisters to the medications continues to mount.

Yet so far -- with the exception of applicants who are older than the norm -- whether or not you’re vaccinated for COVID-19 shots is largely a non-issue when it comes to life insurance. “Insurance carriers are not requiring any proof of vaccination as a condition of being approved for coverage,” says Scottsdale, Az. life insurance agent Chris Huntley.

Assaf Henkin, President & COO of online life insurance broker Sproutt concurs, and adds there's also “no evidence that either insurers or reinsurers are using [COVID-19 vaccination status] for pricing decisions.” Consequently, Sproutt is not asking whether people are vaccinated for the virus as part of the pre-approval process it uses to help pitch customers to the insurers it works with.

The industry’s seeming disinterest in COVID-19 vaccinations comes in spite of recent studies revealing that unvaccinated Americans are anywhere from 15 to 67 times more likely to die from the virus than those who have received their shots. What gives?

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Why life insurers aren’t factoring in vaccinations

To start, it may be worth clarifying that life insurers aren’t skipping asking people about their COVID-19 vaccinations for any clear legal reason. While the legality of health insurance surcharges may eventually be challenged in court, it appears they are permitted by employers, like Delta, that self- fund their plans. And those same laws do not apply to life insurance anyway. “I know of no law prohibiting life insurance companies from asking about COVID vaccination status,” says Michael Giusti of InsuranceQuotes.com, who wrote among the more comprehensive reports on COVID-19 and insurance.

Rather, the life insurance industry seems not to see COVID-19 as a big enough ongoing threat to most of its potential customers to upend its practices. “My guess is they think it's a short-term issue, not a big enough mortality factor to change their insurance application [processes] or pricing,” says Arizona-based insurance agent and blogger Chris Huntley. Huntley also sees COVID-19 vaccinations as among ”dozens of variables [insurers] could factor into their pricing but don’t.”

The approach to COVID-19 shots is also consistent with how the industry treats inoculations of all kinds, says Laura McKiernan Boylan, Head of Underwriting Solutions at Haven Life. “In general, vaccines are not considered in life insurance underwriting,” Boylan said in a recent article Haven wrote for its website.

That, she adds, means that your life insurer does not evaluate your vaccination history before determining whether or not to issue you a policy. You don’t need to list any of your vaccines when you apply for life insurance online, she says, nor do you need to provide vaccine records if you take a life insurance medical exam.

Well-worn practice also plays a role in their approach to COVID-19 vaccinations, says Huntley. Life insurers are loath to change the way they do business, because it disrupts the careful actuarial formulas that underlie their decisions, he says. “Insurance carriers take a very long-term approach to pricing, and rarely amend their pricing, even when good evidence exists for them to do so.”

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Ways that COVID-19 vaccines may still matter to insurance

Vaccine status is, however, being considered for life insurance customers who are older (and sometimes sicker, as well) than is typical for a coverage that’s primarily for young and middle-aged people. Older people -- those in their 60s and up -- who get COVID-19 are at least nine times more likely to die than those who are in their 40s, according to the federal Center for Disease Control.

Henkin says Sproutt says many insurance companies are requiring proof of vaccination for applicants who are older than 80 years old or are over 60 with a health condition before they will grant policies. The trend isn’t changing the company's own pre-qualification regime, however. “As the average Sproutt customer is unlikely to fall under either category, it is not yet a factor in our evaluation process,” Henkin says.

Being vaccinated may allow those who were denied coverage during the pandemic to have a second chance at coverage, Boylan predicts. Some insurers opted during the pandemic to limit or eliminate writing policies for those with conditions such as diabetes or heart disease, because of the comorbidity risk if the patient also contracted COVID-19. If you can now prove that you have been vaccinated for COVID-19, she says, insurers might be more likely to offer you a life insurance policy. “The COVID vaccine might re-open coverage,” she predicts.

And it’s possible that COVID-19 vaccination status could become more important to life insurance in future, several experts said. “If vaccines make you live longer, then vaccinated people will get lower rates eventually,“ says Giusti.

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