The pandemic has fundamentally changed the way Americans shop for essentials. Clothing, groceries and even prescription drugs are increasingly purchased online.
What they’re shopping for has changed as well. Applications for life insurance policies jumped 4% in 2020 — marking the highest year-over-year annual growth rate since 2001.
But while you can shop for almost anything else from the comfort of your couch — even other other forms of insurance, like auto, through comparison-shopping sites — until now, the process of buying life insurance has been much more complicated, including going to an in-person doctor’s appointment for a medical exam.
Some consumers have been left wondering whether finding an affordable life insurance policy means having to ignore public safety guidelines.
But the pandemic has caused a proliferation of the availability of no-exam life insurance, which you can get without leaving your home — meaning you don’t have to choose between protecting your family’s future and your own health.
How has the pandemic changed life insurance?
No-exam life insurance has been around for a long time. Until recently, it was the only option for high-risk individuals living with medical conditions or working dangerous jobs that make it hard to lock in life insurance.
But when the pandemic hit, having to travel to do a medical exam became more than an annoyance — it suddenly wasn’t safe.
In response, more than a third of life insurers have now expanded their offerings of accelerated underwriting during the pandemic.
With no-exam life insurance, you can skip the medical exam with its blood draws, urine tests and uncomfortable questions. You’ll simply fill out an application, and within minutes you’ll see the option you qualify for — and be able to immediately secure the coverage your family needs.
How does the process usually work?
Medical exams have long been an important part of the underwriting process for life insurance.
Each insurer has its own underwriting process, but generally after you submit an application, you’ll have to do a phone interview with an underwriter, take a medical exam and then allow the insurer to check whether you’ve applied for other life insurance policies and look into your prescription drug and driving history over the last few years. From there, an adviser will go through all the information to come up with a life expectancy and based on that, give you a quote.
This whole process can take up to two months.
How are some insurers adapting?
While insurers are aware consumers want the process to be easier, they also can’t just assign rates without some underwriting.
They first need to make sure they’re not overpromising because underdelivering in this situation would mean being unable to pay out claims as they come in — which could be disastrous.
And in some states, they also need to be able to legally justify their reasoning for coming up with rates in case an applicant ever contests their offers.
So getting rid of underwriting isn’t realistic. But over the last few years, some insurers have been using data and analytics to speed up and streamline the process.
At this point, there’s more than enough data out there on most categories of life insurance applicants to accurately calculate a fair premium without having to subject the person to a medical exam.
Some brokers can now even show you a quote within minutes of submitting your application.
What this means for you
Some online insurance companies can now take the information you provide through your application and run it through an algorithm that assesses your risk.
If you qualify, you’ll get coverage right away, without ever having to talk to anyone on the phone or taking a medical exam.
At a time when it feels like so many choices have been limited for us, you won’t have to choose between security and safety.
If you’ve been holding off on buying life insurance because you can’t safely leave your home or you think it’s going to cost an arm and a leg to opt out of a medical exam, you now have options.
Source: MSN Money