Underwriting in the Time of COVID-19

As with all industries, the insurance market has been greatly affected by the COVID-19 pandemic—particularly around the practice of underwriting. For the uninitiated, Life Insurance Underwriting is the method through which insurers evaluate the risk of potential buyers in order to decide whether or not to approve, deny, or rate up a life insurance policy.  As a rule of thumb, the healthier a person is, the less risk he/she poses, and the lower rates he/she will get.

Traditionally, this process often required a lengthy application, in-person paramedical exam with lab work, along with an analysis of habits and lifestyle before coverage is approved. With the current shelter-in-place orders, many are juggling multiple tasks such as work, parenting, playing the role of teacher, managing (and worrying) about their own health and that of their family, while just trying to maintain overall sanity. That said, there is no time for a lengthy life insurance application process requiring travel and close contact followed by multi-week approval wait times. Due to health risks and our new reality, many companies are expanding their automated underwriting process to streamline and simplify the entire procedure.

Since the initial wave of shutdowns in March, the insurance industry as a whole has been booming with new applications and requests for an array of life insurance, disability coverage, and long-term care products. With the second surge of coronavirus upon us, there is a renewed sense of urgency to acquire insurance coverage prior to contracting the disease.

The good news is you may qualify for accelerated underwriting to get your life insurance policy issued. Accelerated underwriting is a simpler approach to getting life insurance compared to traditional underwriting with the purpose of making it easier and faster for people to obtain coverage. Almost all companies have adopted an accelerated process for issue ages 18-60 and up to $5M of coverage. Digital applications, telephone interviews, electronic medical records, and the use of large data resources are offering multiple ways to apply, and carriers are actively expanding and improving capabilities while phasing out the need for in-person exams.

And, of course, with numbers rising, vaccines on the way, and so many unknowns in the year ahead, there are bound to be more changes and innovations in how the insurance industry answers the underwriting needs of this moment.

Whatever your situation, do not hesitate to reach out with your questions around how to navigate this changing landscape so that you can acquire the coverage you need to restore peace-of-mind for 2021 and whatever comes next.