The outbreak of Covid-19 has resulted in widespread panic and a decrease in the global demand for life insurance products. The pandemic has caused many insurers to re-evaluate their product offerings and make changes to their underwriting standards. Bill Schantz of Mid Atlantic Financial LLC will analyze how the worldwide pandemic affected the life insurance industry.
The Effects of Covid-19 on Life Insurance Industry
Short-Term Effects
In the short term, the most immediate effect of Covid-19 on insurers has been a decrease in demand for new life insurance policies. This is due to both the general economic uncertainty caused by the pandemic as well as the fact that many people are simply not comfortable meeting with an insurance agent during such a time of crisis. In addition, many life insurance companies have temporarily suspended sales of new policies in order to focus on servicing existing policyholders.
While new policy sales have decreased, Bill Schantz has noted an increase in demand for “living benefits” riders which allow policyholders to access a portion of their death benefit while they are still alive. These riders can be used to help cover expenses related to long-term care or terminal illness.
Medium-Term Effects
As the pandemic continues, we are beginning to see some medium-term effects on the life insurance industry. One of the most significant of these is the change in underwriting standards that many insurers have implemented in order to account for the increased risk associated with Covid-19. These changes include things like requiring a higher minimum age for coverage, as well as increased premiums for those who are considered to be high-risk. In addition, many life insurance companies are now offering “pandemic riders,” which provide additional coverage in the event of death due to Covid-19.
Long-Term Effects
The long-term effects of Covid-19 on the life insurance industry are still unknown. However, Bill Schantz believes that we will see a decrease in the overall demand for life insurance products as people become more hesitant to purchase them. In addition, the changes in underwriting standards that have been implemented in response to the pandemic are likely to remain in place for the foreseeable future. This could result in higher premiums and less coverage for those who do choose to purchase life insurance.
Should You Get Life Insurance?
The decision of whether or not to purchase life insurance is a personal one. However, it is important to remember that the primary purpose of life insurance is to provide financial security for your loved ones in the event of your death. If you have dependents who would be financially impacted by your death, then life insurance may be something you want to consider. In addition, if you have any concerns about how Covid-19 may affect your ability to qualify for coverage in the future, it is best to apply for a policy sooner rather than later.
Conclusion
The outbreak of Covid-19 has had a significant impact on the life insurance industry. Most industries were negatively affected by the Covid-19 pandemic. Life insurance industry, however, has benefitted from it. Bill Schantz is of the opinion that life insurance industries should cater to their clients even more nowadays.