Many people don’t prepare for the unexpected until the unexpected happens.
That’s especially true now, in the midst of the coronavirus pandemic, but it’s also a reminder to be thinking about your insurance policies and what coverage makes sense.
So in a time of uncertainty, make certain all you can.
If you’re thinking about life insurance, you’re probably not alone. New Jersey’s deaths from the coronavirus increased to 1,003 on Monday and health officials announced the peak of the outbreak is still likely weeks away.
That figure may cause panic for residents and could serve as reminder to check on your life insurance policy or provide the impetus to apply for a plan. According to the Insurance Information Institute, life insurance policies cover deaths relating to COVID-19.
Most policies carry a two-year contestability clause, which allows the insurer to examine a claim during that period. Altair Gobo, a founding partner of U.S. Financial Services in Fairfield said insurers will scrutinize questions relating to pre-existing conditions and other health concerns. Questions relating to travel, both in the past and planned trips, may also be scrutinized.
“As long as you answered all the questions on your application honestly your policy will pay ... even for coronavirus,” Gobo said. "Underwriting has not changed, but if the policy you are purchasing requires a medical exam some people may not be comfortable going through such a process during the current crisis.
Alternatively, online agencies like Fabric and Haven Life offer policies most people can apply for in minutes without an exam. Fabric reported a 50% increase in applications since February, but a recent survey of 47 insurance providers reported no significant change. The survey conducted by LIMRA, a Connecticut-based research firm, said it’s too early to tell how coronavirus will affect first quarter sales nationwide.
Is health insurance a concern?
More than 6 million Americans — including 206,253 New Jersey residents — have filed for unemployment due to the economic fallout from the coronavirus.
That’s a major concern for so many residents who receive health insurance benefits from their employers. According to the Kaiser Family Foundation, 57% of New Jersey residents depended on their employers for health insurance in 2018.
In a briefing Friday, Gov. Phil Murphy said he is petitioning the federal government for an open enrollment period for the state’s health care exchange, which would help those who have lost their jobs.
Unlike some other states, New Jersey may be better prepared to deal with the fallout said Rebecca Kolins Givan, co-director of the Center for Work and Health at the Rutgers School of Management and Labor Relations.
New Jersey offers the NJ Family Care Program, a state and federally funded public health insurance program, she noted, and also participates in the ACA, or Obamacare, exchange.
While the state has a wider safety net compared to other states, Kolins Givan said the federal government should do more in its next federal stimulus bill, including reimbursing employers who are keeping their workers on health insurance.
A shot from the scene where one person was injured when two cars crashed March 27, 2020, at Belvidere Avenue and Buckley Avenue in Oxford Township, police said. With fewer cars on the road, should insurance rates drop?Rich Maxwell | lehighvalleylive.com contributor
With less travel should car insurance rates drop?
Allstate and American Family recently announced plans to return policy relief to customers as fewer cars are leaving the driveway during the coronavirus lockdown.
Allstate said it would return $600 million to customers who are sheltering in place and no longer driving to work. The announcement came in response to calls from consumer groups claiming less travel, fewer cars on the road and ultimately fewer accidents should result in lower costs.
“Allstate and American Family deserve praise for their industry leadership on this vital first step,” said J. Robert Hunter, Consumer Federation of America’s Director of Insurance, in a release Monday. “While it’s too early to tell if the amounts promised are enough to reflect the big drop in auto accidents, the actions by American Family and Allstate are the right thing to do to help policyholders beleaguered by COVID-19 restrictions and job loss. We urge other insurers to take similar actions quickly.”
Dan Karr, founder and CEO of free insurance grading service ValChoice, said Allstate’s figure should be three times higher and urged auto insurance customers to demand relief from their insurance providers.
In addition, Karr said customers should specify their vehicle is no longer commuting but rather recreational use and in turn reduce the number of miles driven on the vehicle to 3,000 or fewer for the year.
So whether it’s saving money on car insurance or thinking about life insurance, don’t get caught in the unexpected.
Reporters Sophie Nieto-Munoz and J. Dale Shoemaker contributed to this report
Pat Lanni may be reached by e-mail at planni@njadvancemedia.com. Find NJ.com on Facebook for more coverage.