No Medical Life Insurance and COVID-19 | 5 Things You Must Know

The COVID-19 Pandemic in Canada

The Coronavirus (COVID-19) pandemic continues to spread around the world with over 1,350,000 people infected and more than 75,000 deaths to date. Canada is affected with over 17,000 cases and nearly 325 deaths as of April 6, 2020. These numbers are heartbreaking – the crisis impacts every person, every company, and every industry.

The insurance industry is not an exception and many insurance companies are dealing with the uncertainly of how to manage this risk. We talked to life insurance professionals to understand what will change with respect to life insurance and, in particular, no medical life insurance.

What is No Medical Life Insurance?

As opposed to traditional (also called standard or medical underwritten) life insurance that comes with a medical test/exam performed in person by a nurse, no medical life insurance comes without a medical exam. It is not surprising that this type of insurance is well suited for the COVID-19 pandemic. It is important to mention that standard life insurance can also come without a medical exam in some cases, but if you have health pre-conditions, no medical life insurance might be your only option.

No medical life insurance comes in two forms: simplified life insurance and guaranteed life insurance (sometimes referred to as simplified issue and guaranteed issue life insurance).

Simplified issue life insurance: This type of no medical life insurance has no medical test but does have a short medical questionnaire. If you are able to reply truthfully “no” to all the questions, you automatically qualify for it. The rates are approximately twice of that for medically underwritten plans (or standard plans).

Guaranteed issue life insurance: These plans are more expensive than simplified issue plans and their limits are much lower, typically $25,000 or less. They also have a deferred feature associated with them meaning that if you were to die from any reason other than by accident in the first two years, your beneficiary would only receive a return of the premiums you paid. After two years the benefit amount is paid if the life insured passes away.

Now that we understand what no medical life insurance is, let’s understand what underwriters expect to change with resect to no medical life insurance.

1. More People Will Buy No Medical Life Insurance

Traditional life insurance is linked to in-person medical tests and these are nearly impossible in the current situation. No medical life insurance does not have a physical exam and thus will become one of the preferred options for many Canadians (together with medically underwritten life insurance without exams).

2. No Medical Life Insurance Coverage Limits are Going Up

Since no medical life insurance will be substituting for traditional life insurance, we expect that to see increases in coverage limits to make it more attractive for a wide range of customers. Many companies started increasing the limits already. Typical coverage limits in the past were around $50,000- $300,000; today, some companies offer no medical life insurance policies with coverage limits between $500,000 – $1,000,000. That means, no medical life insurance can cover a wider range of financial needs such as your mortgage.

3. The No Medical Life Insurance Questionnaire Will Change

Given the current COVID-19 situation and its impact on life insurance, insurers will likely start changing their applications. That means, many will include additional questions into the questionnaire focusing on travel history/plans, potential exposure to COVID-19, and existing signs of the illness. So far, insurers were slow to react to the quickly evolving COVID-19 situation, but they will do so more expediently once the current situation stabilizes.

4. No Medical Life Insurance May Become More Expensive

In general, given the current situation and people being exposed to COVD-19, paired with limited knowledge about this disease, insurers will likely hedge themselves against potential losses. Expect higher prices for the same amount of coverage as the underwriters must offset potential claims losses. We expect that coverage prices will increase as we move further into the COVID-19 crisis.

5. People Will Have to Buy No Medical Life Insurance Remotely

In the past, people could buy no medical life insurance through different channels (e.g. in-person meeting with an insurance broker or agent, remotely through calling a contact centre or broker, or even online). Now, buying no medical life insurance remotely through a broker is becoming the preferred way. Remote purchasing combines both the safety to make a purchase from the comfort of your home without exposing yourself to COVID-19 and the broker’s ability to compare prices across numerous insurers using online resources.

How Can you Get No Medical Life Insurance?

Don’t be without the protection of life insurance, especially during this crisis. Experienced brokers are standing by to help you with no medical life insurance applications that can be completed over the phone or online. Act now – we expect prices to increase as underwriters continue to assess this new risk.

Please call us if you: have any questions about your existing coverage or any other life/health insurance questions, if you would like to purchase no medical life insurance, or to get a free quote. Our team is ready, willing, and able to happily assist you remotely.

Remote work is what we do! We’ve been set up to help Canadians get the life insurance they need over the phone or online for 25 years. With access to more than 20 life insurance companies, not only can we find the policy that fits your needs and your budget, we also have direct access to how each insurer is addressing COVID-19. We are in the loop.

With our many years in business and direct access to insurers, along with our vast resources to support both brokers and their clients, we are able to save you more money than many other insurance firms.

Contact us today. We look forward to hearing from you.