COVID-19 and No Medical Life Insurance – What You Must Know

The latest COVID-19 developments

The coronavirus (COVID-19) pandemic continues to spread around the world at an alarming rate. In April, the virus had infected more than 2 million people and caused over 170,000 deaths worldwide. During April, Canada experienced more than 30,000 infections and over 1,700 deaths. Everybody knows someone that had been affected by the pandemic, be it through illness or job loss or major life changes.

With numbers rising sharply, particularly in the U.S. and Europe, and without a vaccine in place, insurance companies are trying to adjust their approaches, products, and customer service to the new normal.

We talked to veterans in the Canadian life insurance space: Richard Parkinson (15+ years of life insurance experience) and Lorne Marr (25+ years of life insurance experience) to better understand the changes in the no medical life insurance stream.

Let’s find out what they had to say.

Role of no medical life insurance during COVID-19

Before talking about the role of no medical life insurance in the current pandemic, it is important to understand how this insurance works because it has several very particular properties.

Traditional life insurance (also called fully underwritten life insurance) typically comes with extensive medical tests and a long medical questionnaire. This allows insurance companies to determine, very precisely, the level of risk associated with a policy holder.

No medical life insurance comes without a medical exam and can either have a short medical questionnaire, containing between three and 12 questions (simplified life insurance/simplified issue life insurance), or no questionnaire at all, meaning that you are pre-approved for the coverage (guaranteed life insurance/guaranteed issue life insurance). In most cases, the process for getting no medical life insurance is faster than getting traditional life insurance. However, no medical life insurance comes at a cost. Since the insurer assumes more risk, the premiums are higher.

Right now, the aspect of not having a medical test (no need for a nurse’s visit) makes this insurance type very attractive for Canadians during the COVID-19 pandemic.

Accordingly, no medical insurance providers have evolved their coverage during the pandemic. Let’s see how it has changed.

How is no medical life insurance changing with COVID-19?

There are two main developments we are observing during COVID-19 with respect to no medical life insurance.

First, the share of no medical life insurance is going up because Canadians often do not have access to standard life insurance to the same extent as they had before (e.g. due to requirements for in-person medical tests). Strictly speaking, it is possible to get medically underwritten traditional life insurance without a medical exam, but this offering is limited to particular age segments and individuals without health pre-conditions in those narrow segments. Other Canadians find that no medical life insurance is an option that addresses their needs.

Secondly, we see dramatic changes in the no medical life insurance coverage limits. A couple years ago, these were limited to $300,000 for simplified issue. Today, we see increases of up to $1,000,000 – $2,000,000. A table below provides a more detailed breakdown.

 

Pre-Covid-19: typical maximal coverages

Covid-19 pandemic: typical maximal coverages

Simplified Life Insurance

$300,000 – $500,000

$1,000,000 – $2,000,000

Guaranteed Life Insurance

$25,000

$25,000

How do various insurance companies define coverage limits during the COVID-19 pandemic? Let’s look in detail at what each insurance company offers. One thing to remember is that the data changes daily – please contact our insurance specialists for the most up-to-date information.

No medical life insurance limits by company during the COVID-19 pandemic

No medical life insurance coverage limits vary across companies as each insurer has its own risk tolerance and rules. In addition to that, coverage limits vary widely across different age groups, too. The younger the age of the applicant, the higher the possible coverage is available to him/her (pending the applicant’s good health).

Here is a detailed overview of the no medical life insurance limits offered by different companies during the COVID-19 pandemic. Note that each company has several limits in place varying across different age segments. The table below (for mid-April 2020) shows coverage in the descending order, starting with the largest ones.

 

It is interesting to note that three companies offer coverage limits of $2,000,000: Sun Life and Canada Life for ages 18-40, and Manulife for ages 18-50. Plenty of insurers offer coverage limits of $1,000,000 with age ranges typically going up to 50. Manulife, as the only exception, offers coverage of up to $1,000,000 to people aged 50-60. These levels of coverage were, in the past, reserved for traditional life insurance policies.

More senior applicant segments can benefit from higher coverage limits as well, though these will not be as high as the coverages described above.

If you are interested in a detailed view of limits by company, please consult the table below (status: Mid-April 2020):

 

Company

Max. Non Medical Insurance Coverage

Age Range

Assumption life

 $ 1,000,000

 0-17

 $ 499,999

 18-45

 $ 249,999

 46-65

 $ 50,000

 66-69

BMO Insurance

 $ 1,000,000

 18-50

 $ 300,000

 51-60

Canada Life

 $ 2,000,000

 18-40

 $ 1,000,000

 41-50

 $ 500,000

 51-55

 $ 100,000

 56-64

 $ 50,000

 65+

Canada Protection Plan, Simplified Elite

 $ 500,000

 18-60

 $ 350,000

 61-80

Canada Protection Plan, Express Elite

 $ 750,000

 18-50

 $ 500,000

 51-60

Empire Life

 $ 1,000,000

 18-50

 $                        300,000

 51-60

Equitable Life

 $ 1,000,000

 18-50

Foresters

 $ 500,000

 18-45

Humania

 $ 1,000,000

 18-45

Industrial Alliance

 $ 1,000,000

 0-50

 $ 300,000

 51-60

ivari

 $ 1,000,000

 17-50

 $ 500,000

 41-45

 $ 250,000

 46-55

Manulife

 $ 2,000,000

 18-50

 $ 1,000,000

 51-60

RBC Insurance

 $ 1,000,000

 18-50

 $ 499,999

 51-55

 $ 300,000

 56-60

 $ 99,999

 61+

SSQ Insurance

 $ 750,000

 18-50

 $ 99,999

 51-55

Sun Life

 $ 2,000,000

 18-40

 $ 1,000,000

 41-50

Wawanesa

 $ 1,000,000

 18-50

 $ 500,000

 51-65

This data is subject to change. Contact our insurance specialists for the most recent data.

How to get no medical life insurance

If the pandemic has shown us anything, it’s the folly of being unprepared. Nobody expected a global disaster on this level, but those with life and health insurance already in place had one less worry as everyone scrambled to get their affairs in order. It is not too late to get life insurance. Remember that it is more than protection for your loved ones. Some policies advance part of the premium for those that become drastically ill (with some exclusions). Some policies come with other living benefits. Our specialists will explain more and guide you to the policy that best suits you and your family’s needs now, and into the future.

We are set up to work with you remotely, even for signing your documents. With direct access to more than 20 different life insurance companies, we know we can show you a policy that fits your lifestyle and your budget. Rely on our 25+ years of experience and call us today for the life insurance you need.

We look forward to serving you and giving you back some peace of mind.

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