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Policy Matters

Second Quarter 2020


Coronavirus has gotten folks thinking about all kinds of things they never did before:

  • Is my will up to date? (Or should I have a will?)
  • Do my loved ones know how I feel about them?
  • Am I too reliant on the stock market? (Are my assets properly diversified)
  • Can I survive without a paycheck for more than a month?
  • Is my family set up to be okay if I’m no longer here?

We’ve had advisors ask us about their clients and their insurance policies, and would they be covered? So here it is in a nutshell.

Disability Insurance

What if I contract COVID-19 and am quarantined for a period of time for the prevention of transmission of the disease? For purposes of COVID-19, and subject to policy provisions, clients generally will be entitled to benefits if they become infected with COVID-19 while their policy is in force and the following conditions are satisfied:

  1. They test positive for COVID-19 using test criteria established by the Centers for Disease Control and Prevention (CDC); and
  2. As the result of following applicable federal or state quarantine requirements, for the prevention of transmission of the disease, they are restricted from performing the material and substantial duties of their occupation or occupations; and
  3. If quarantined, they are unable to work from an alternate or quarantined location, including home.

Each claim is, of course, evaluated on the insured’s individual circumstances, and this information is based on what is currently known about this highly dynamic topic. Like other organizations and agencies, insurance companies will be modifying procedures as it evolves. However, policy provisions will continue to govern the contract.

Long story short, the COVID-19 virus is like any other covered illness. But since elimination periods on disability policies are commonly 90 days, your clients may have recovered and be back to work within that three-month window.

Underwriting tidbit:

Generally, paramedical exams including labs (urine sample, blood work, measurements, etc.) are a requirement in disability insurance applications. In this world of COVID-19, underwriters are taking a different approach for applications with a monthly benefit of $10,000 or less: reviewing your clients’ applications and telephone interviews to determine if those paramed exams are necessary or if they can make an underwriting determination with the information they have.

Additionally, one company we work with has increased issue and participation limits to offer monthly benefits of up to $30,000 as long as income supports that higher limit.

If your clients are thinking about disability insurance, now is a great time to go into underwriting.

For help with -- or information about -- Disability Insurance, please contact Brian Ciccarelli.

Life Insurance

Policies do not exclude pandemics so your clients will be covered if they have an existing life insurance policy.

Underwriting tidbit:

To get a policy today, life insurance companies are asking additional information:

  • Have you been diagnosed with COVID-19?
  • Have you been in contact with someone who has been diagnosed with COVID-19?
  • Have you traveled internationally in the last 30-90 days or been on a cruise?
  • Do you have scheduled future international travel?

If approved, your clients will be asked to sign a “Good Health Statement” verifying that there have been no changes to any of these questions (or any other health related matters).

For help with -- or information about – Life Insurance, please contact Mark Maurer.

Long Term Care Insurance

Similar to DI, a claim for LTC related to COVID-19 would be covered if:

  1. The insured has satisfied their elimination period (often 90 days)
  2. The insured can’t perform 2 or more of the 6 Activities of Daily Living without hands-on or standby assistance and a physician expects that to continue for 90 days or more:
    • Eating
    • Bathing
    • Getting dressed
    • Toileting
    • Transferring
    • Continence
Underwriting tidbit:

Some companies are reducing the maximum age for a LTCi applicant, since the COVID-19 virus impacts the older population.

LTCi underwriters also use “face-to-face” cognitive screenings to assess someone’s mental capacity, as well as to evaluate their home safety/cleanliness situation. With social distancing, these face-to-face screenings may not be possible for all applicants, so LTC companies are looking for suitable alternatives.

For help with -- or information about -- Long Term Care Insurance, please contact Jill MacNeil.

The bottom line: If your clients have DI, Life, or LTCi policies, they would be covered for COVID-19-related claims.


Term Life Insurance | Low-Load Universal Life (Individual & Survivorship) | No Lapse Guaranteed Univeral Life (Individual & Survivorship) | Long Term Care Insurance | Disability Insurance | Critical Care Insurance | Low-Load Variable Annuity | Immediate and Fixed Annuities | Low-Load Variable Universal Life | Hybrid Life/LTCi | Hybrid Annuity/LTCi

(We recommend low-load permanent life insurance and annuities when possible)

(Not all policy types available in all states)

For a list of current providers, visit the Advisor Tools section of our website and click on "Insurance Companies We Work With".

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