Ask yourself these questions: What if you or one of your loved ones contracted CoViD-19? Are you financially prepared to tackle the expenses? Heaven forbid, but what would happen to your family if you didn’t make it?
If there are two things that the pandemic has taught us, it is that (1) life is so fragile that it can swiftly go by and (2) one’s financial situation can change in a blink of an eye.
Life insurance plays a significant role in navigating this life’s biggest lessons to date.
How important life insurance is
People around the world generally recognize how valuable life insurance is to their lives. However, in the United States, about 46% of the population has no coverage of sorts whatsoever.
Before that, though, a survey conducted by the Life Insurance Marketing and Research Association (LIMRA) revealed that one in three families admitted to the possibility of facing financial difficulties if their primary breadwinner dies.
The July 2020 Sentiment Study also claimed that individuals with life insurance are less likely to worry about having sufficient coverage if they had the virus compared with their non-insured counterparts. As a result, about three in every five individuals express the heightened need for life insurance.
The fact cannot be emphasized enough: life insurance plays a vital role in protecting the family’s financial security. There are three aspects to look at here.
- Life insurance safeguards the family’s future to carry on with their lives with comfort and dignity despite the sudden demise of its breadwinner.
- Life insurance guards against any financial instability in case of unexpected events.
- Debt coverage, wherein life insurance can also help settle financial obligations if there are any.
For instance, rent freezes during the pandemic are implemented, but once health protocols and lockdowns are lifted, monthly rental fees (residential, industrial, and commercial) would ensue. How will you settle the missed rental payments? Insurance firms allow policyholders to borrow against or withdraw partially from the insurance policy’s account value.
With the coverage’s help, you may build the funds you need without the hefty interest, unlike borrowing from a financial institution.
The pandemic awakened the interest in life insurance.
Losing the source of income permanently is a problem that life insurance can solve. The problem is the majority of us have this problem; only a few realize this. This creates the mindset that life insurance is sold and not necessarily bought by the people.
Despite this, there had been a spike from January to March 2020 in life insurance search terms on Google Trends. The increase coincided with the first few months of the global health crisis.
This is also true in the case of the Philippines, for instance. Life insurance queries on Google peaked from the last week of February to the first week of March. Life insurance is not the only search term the Filipinos are searching for; they also want to know more about life insurance meaning and life insurance benefits.
Another LIMRA study, this time with the insurance companies, found out that life insurance applications and sales rose by up to 24% in March. Insurance applications are specifically significant for mobile platforms. Mail and call center applications also experience a 9% increase while face-to-face applications, 7%.
Furthermore, the MIB Life Index, a measure of insurance applications in the US, reported that the demand for insurance policies reached its peak since 2015. It happened from January to February 2020.
What does this mean for the people?
True enough, attaching money to death seemed innocuous for some. However, skeptics remain intolerant, saying it’s grim to talk about money while the death tolls keep on rising globally.
Nonetheless, post-pandemic hopes are high. CoViD-19 will help drive the demands for insurance products, especially life insurance.
On the other end of the spectrum, the Philippines’ life insurance industry was quick to respond. It immediately accommodated death coverage due to CoViD-19, although there had not been any surge of claims since the pandemic hit.
Financial literary is still evolving in the Philippines, which may explain the low claims rate. It means that only a fraction of the entire population and the CoViD-19 statistics are insured.
Demands for life insurance products in the Philippines would see an increase. The industry continuously reaches out to the people and offers them insurance policies that would secure them and their loved ones.
Now, if you are contemplating on getting a life insurance policy, the pandemic-related factors may implicate your application and approval.
If your medical history indicates a higher risk at the time of application, expect to pay higher premiums. The severity of the health conditions will also affect the underwriting process. If you (unfortunately) succumbed to the virus and recover, this may also put you in higher brackets.
It all boils down to talking to a life insurance expert to know where everything stands. Don’t let the pandemic stop you from protecting your loved ones from this point forward. The health crisis must compel you to reevaluate how you treat uncertainties and how they would affect your and your family’s wellbeing, now and in the future.