"your in-force life insurance policy will pay out the death benefit if you get coronavirus".
This Blog is not intended as insurance, legal, and/or taxation advice. I recommend that you discuss all pros and cons with a credentialed State licensed life insurance Agent prior to deciding on the purchase or replacement of any life insurance contract(s).
Instead this Blog is to help inform readers that during these unprecedented times your clients are definitely wondering if purchasing a new life insurance policy is even possible.
N.E.L.I.
“Newly issued life insurance contracts are now accessible digitally via website and/or phone.”
No Exam Life Insurance for permanent life insurance policies is intended as a temporary relief for insurers in direct response to the crushing reduction of new applications being processed since the start of the COVID pandemic.
The two big ones here are Social Distancing Mandates and Very Busy Doctors.
1. The coronavirus pandemic, coupled with ongoing social distancing mandates, has made traditional life insurance underwriting challenging in the areas of in-person face-to-face meetings with Agents and in-person paramedical exams.
2. As a direct result of COVID and the increased hospitalizations of patients, physicians at every level of care are overwhelmed and providing responses for APS (attending physician statement) records can be slow. Especially if underwriting requires follow-up questions regarding APS records.
Most insurers agree that; “Having an exam is not feasible or practical.”
- John Grogan of Northwestern Mutual
NELI is exactly what it sounds like. It’s life insurance that you can get without undergoing a physical medical exam. The entire application process is done online and/or over the phone.
· Don’t require a medical exam - no blood or urine draws
· Require little-to-no health information
· Can be applied for entirely online
· Have a quick approval process
It is important to note, that in the application process many life insurance companies have added questions about COVID-19 and have limited the maximum policy death benefits to be be issued.
The NELI Response
"life insurance companies are open for business and are taking applications".
Companies that required a life insurance medical exam a few months ago have various NELI programs in place as an alternative to a paramedical professional coming to your house and taking a variety of measurements such as height, weight, blood, urine, and blood pressure.
Life insurers rely more heavily on data. This could include past doctor’s records, prescription data and other types of personal information that they routinely gather.
Insurers “use alternative data sources” instead of a medical exam when stay-at-home orders prevent an exam. This is a clear move for the insurance carriers from paper, fluids and records to data.
Depending on the insurer, the NELI options will vary. With one insurer offering "no exam" options for up to $3 million of death benefit for up to age 50 and $1 million up to age 70 as long as the insured has an underwritten health classification of Standard non-smoker or better.
NELI for your Parents?
I don't think that coronavirus significantly changes the answer to whether or not you need a life insurance policy for yourself or your parents. My recommendation has always been that life insurance is necessary for anyone whose death would result in financial strain for another person.
You may want to consider buying a policy like this if you expect one, or both, of your parents won't be able to afford long-term care, and you think you may get stuck subsidizing this significant expense.
If you already provide financial support for your parents, this may be a way to ensure your financial future as well.
Consider this scenario: you buy a life insurance policy with long-term care coverage and you know a certain amount of their care will be covered, if they need it.
If they end up not needing LTC, you will receive a death benefit to help repay the money you have given them throughout the years or use this money to help top off your retirement accounts.
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