Does Life Insurance Cover COVID-19?

The pandemic has raised questions about insurance coverage, especially for life insurance. Searches for "Does life insurance cover COVID?" and "Does life insurance cover pandemics?" yield over 1.2 billion and 500 million results, respectively.

People are now more motivated to ensure adequate insurance and financial protection for their families, but confusion and misinformation online have created further concerns about how life insurers handle COVID.

If you have questions about how COVID-19 affects life insurance coverage, here are some considerations.

Does Life Insurance Cover Any Costs Related to COVID-19?

While health insurance provides coverage for medical treatments, life insurance provides a death benefit to named beneficiaries after a policyholder dies. Some life insurance plans do offer cash benefits that could help to cover health care and other expenses should you become sick with COVID-19. Certain life insurance plans provide cash benefits for COVID-19-related healthcare and other expenses.

It's important to remember that loans or withdrawals from your policy's cash value may generate an income tax liability, and they will reduce the cash value and death benefit. Loans will also accrue interest.

Does Life Insurance Cover Pandemics?

Yes, life insurance does cover pandemics, according to the National Association of Insurance Commissioners (NAIC).¹ The organization says "there is no pandemic exclusion for life insurance," so if you have an active policy that is in good standing, a life insurance company cannot deny your claim.

Does Getting COVID-19 Prevent People From Purchasing New Life Insurance?

Similar to other health conditions, getting COVID-19 could affect your ability to qualify for a life insurance policy and how much you pay in premiums.

Insurers look at several factors when determining whether to approve you for coverage and at what rate. These factors include things like your age, medical history, family health history, gender, whether you smoke and even where you live.

As of 2024, COVID-19 is still within the top 3 of leading causes of death, with reports about survivors experiencing long-haul symptoms after contracting the virus.^2,3 If you have ongoing health issues — regardless of whether or not they are related to COVID — this could affect your ability to qualify for a policy, the coverage amount you're approved for or your ability to qualify for life insurance altogether.

Is It Now Harder to Get Life Insurance Coverage Due to the Pandemic?

The COVID-19 pandemic has undoubtedly brought about significant changes in various aspects of our lives, and the insurance industry no exception. Life insurance, in particular, has seen some notable alterations as a result of the ongoing crisis. Many people have been wondering whether it has become harder to obtain life insurance coverage in light of the pandemic.

As a response to the pandemic, some insurance companies have introduced policy exclusions related to COVID-19. These exclusions may limit or deny coverage for policyholders who pass away due to COVID-19-related causes within a specific timeframe after the policy is issued. It is crucial for potential policyholders to review the terms and conditions of policies carefully to understand any potential exclusions.

Will a Life Insurance Company Still Pay if Someone Dies of COVID-19 ... Or a Vaccine for It?

There has been widespread misinformation about this topic online, particularly related to the vaccine. On social media, several users have even claimed that life insurance companies won't pay out death benefits if you get the vaccine.

This is completely false. Several states and industry groups have come out against these claims. In 2021, the Wisconsin Department of Insurance and the Wisconsin Council of Life Insurers, for example, both issued statements debunking these myths.⁵ The council's president confirms that COVID-19 vaccination is not a reason for denying benefits.

There are also false claims that life insurers will deny benefits if you die of COVID-19. According to the Insurance Information Institute (III), this isn't true.⁷ The organization also says it hasn't come across any insurance policy in its research that specifically denies death benefits due to infectious disease — COVID-19 included.

There are certain circumstances in which a life insurance company may deny coverage, but these situations are exceedingly rare. For example, if you failed to disclose on your application that you had COVID-19 or another health condition, or if you provided falsified medical records, then an insurer could have grounds not to pay out death benefits to your survivors. However, an insurer would have to discover any intentional falsehoods during the "contestability period," which typically lasts two years from the date the policy was purchased. If someone dies after this period ends, then an insurer won't be able to deny benefits if they discover the person lied on their application, according to the III.

This is an extreme case, but it's worth mentioning that the bar to be denied the death benefit is pretty high — regardless of COVID-19.

COVID-19 & Life Insurance: How to Get the Coverage You Need

Does life insurance cover COVID, and does life insurance cover pandemics? The answer to both is yes.

As industry experts have said, there are no exclusions in life insurance policies for pandemics or infectious diseases such as COVID-19.⁶ While it's understandable that many people would have these questions in the midst of a global pandemic, it's also important to separate fact from fiction so that people can get the coverage they need.

The pandemic has led to new considerations for insurers and individuals alike. Many people now feel an urgent need to get life insurance. The underwriting process has also changed a bit due to this ongoing public health crisis. It can take longer than usual for some applicants to get this coverage, and COVID has added a new element that insurers need to weigh as they make policy determinations. However, this doesn't mean insurers can deny benefits claims. If a policyholder dies of COVID-19 and their policy is in good standing, their beneficiaries will still receive the death benefit.

The Bottom Line

If you're considering getting a policy or have questions about your existing policy, reach out to your insurer and seek information from credible sources, such as your state's department of insurance or the NAIC. Though the pandemic has had some impact on the life insurance process, this coverage is too important to delay. Even if you have to provide additional information or answer additional questions to get a life insurance policy, it's well worth it.

Sources

1. NAIC INSURANCE BRIEF COVID-19 AND INSURANCE. https://content.naic.org/sites/default/files/inline-files/Insurance%20Brief%20-%20Covid-19%20and%20Insurance.pdf.
2. What Are the 10 Leading Causes of Death in the United States? https://www.healthline.com/health/top-10-deadliest-diseases.
3. What Happens When You Still Have Long COVID Symptoms? https://www.yalemedicine.org/news/long-covid-symptoms.
4. AARP Answers: Your Insurance Coverage and the Coronavirus. https://www.aarp.org/money/budgeting-saving/info-2020/insurance-policies-during-coronavirus-faq.html.
5. Press Release, March 15, 2021, Wisconsin Insurance Commissioner Confirms Getting Vaccinated Will Not Impact Life Insurance Policies. https://oci.wi.gov/Pages/PressReleases/20210315Vaccine%26LifeInsurance.aspx.
6. Are Life insurance claims being denied because of covid? What to Do if Your COVID-19 Related Death Claim Has Been Denied. https://life-insurance-law.com/are-life-insurance-claims-being-denied-because-of-covid/.