/life-ins-56a634e05f9b58b7d0e06884.jpg)
The initial case of the coronavirus COVID-19 disease was first reported in China’s Hubei province in December 2019. The virus spread at a very alarming rate. By 20th January 2020, about 50,000 cases had been reported worldwide, prompting the world health organization to announce a public health emergency of global concern. Research was conducted globally concerning the virus. It was confirmed that the virus is Zoonotic, which means that it can be transferred even from animals to humans. The primary methods that the virus is spread through include coughing, close contact and sneezing. As the spread continues, measures to curb the spread worldwide, including social distancing, travel restrictions, and self-quarantine, have been put in place. One of the areas that will have to deal with the unique challenges that the pandemic has presented is the life insurance industry. One way to ensure that you get a reputable insurance company is to use online review sites such as UK.collected.reviews to see what people are saying about their health insurance. This article seeks to explore how the coronavirus pandemic impacted health insurance.
Financial implications
The pandemic hit the financial market hard, resulting in volatility and significant change in the markets. Life insurance companies have substantial assets to help them cover liabilities, and thus the financial market will affect them in various ways. For instance, though equity markets have improved significantly from the adverse effect that the pandemic has brought, there is still a significant threat that continues to be posed by future decreases in equity and volatility to solvency ratios. Additionally, low rates of interest affect life insurance companies as they are precisely delicate to long term interest rates. The net effect that this will present to the balance sheet relies on the asset’s duration compared to the duration of the liability. Normally, life insurance consists of liabilities with long periods than the available assets in the market. Thus the net effect that an extended period has on interest rates on the balance sheet is most probable to be negative.
Mortality and Longevity
The catastrophic human toll brought about by the pandemic has affected annuity coverage and life insurance. The pandemic’s premature deaths have increased mortality risk liabilities for a majority of life insurance products. However, it must also be known that the extent to which the effects are felt will depend on the policy holder’s area of residence and age. Life insurance companies often also offer protection against the risk of longevity through life-contingent annuity products. Thus there can be a lessening in the anticipated longevity risk of annuities that are already annuitized from deaths resulting from the pandemic. To some extent, the longevity and mortality risk offset each other by acting as a natural hedge. Therefore, the net change in mortality liability linked to the pandemic will considerably vary between life insurance companies depending on the product mix balance they have underwritten.
Age and health restrictions
The coronavirus pandemic can have some implication when it comes to the age and health factor of the insured. Persons with medical conditions and the elderly are more vulnerable to coronavirus and may have more restrictions on them when applying for a health insurance cover. A majority of life insurers have not yet altered how they approach the policies they offer. However, a few have already adjusted the underlying health conditions they can insure and the maximum age of the applicant. This could lead to some individuals becoming ineligible for life insurance.
Effects of quarantine on your application
If you are in quarantine in another location rather than where you reside, this has repercussions when applying for life insurance relating to residency. Certain life insurance company necessitate that your paperwork matches the state you are in currently, even when this state isn’t where you reside. Always discuss with your life insurance as this varies from one insurance company to another.
Life insurance premiums amid a pandemic.
Just as is the case with any medical diagnosis, an ailment’s severity will affect the rate that a life insurer will require you to pay when applying for a policy. While it is true that just getting a virus such as seasonal flu will not result in hiking your insurance premiums, some of the long-term side effects that an illness present can increase your life insurance premiums. If it happens, you contract covid-19, and it presents long-term health effects. This can result in you getting a lower health classification, resulting in a more expensive insurance policy.
In conclusion, the coronavirus pandemic caught the world unawares. It has had many adverse effects. This article has sought to understand how the pandemic has affected life insurance.