Older adults in the market for life insurance have fewer options than they did before the coronavirus outbreak. Several of the country's largest insurers are suspending or delaying applications for new policies based on age, citing the greater risk posed by COVID-19 to people 65 and older.
Prudential, Lincoln National and Mutual of Omaha are among the companies putting limits on sales to people in their 70s and up. And some firms are holding up policy requests for people under age 70 who have health conditions that increase the risk of their dying from COVID-19, says Frank Kumpuris, vice president of life operations at Policygenius, an online insurance marketplace.
Insurers say the moves are temporary and are rooted in their need to manage risk amid the evolving outbreak and ensure that they can meet obligations to existing policyholders.
"We do not take making these changes lightly and did so after considering the impact on our prospective customers and business,” says Jeff Bakken, public relations manager at Securian Financial, which is not taking applications for life policies from individuals age 71 and over through at least June 15. “We will revisit this decision as the impact of the pandemic becomes clearer."
The restrictions apply only to people shopping for new policies. If you already have life insurance, the death benefit will be paid should you succumb to COVID-19, regardless of your age.
Rising mortality risk
Age generally plays a role in the cost of life insurance. Each year you delay purchasing a policy, the amount you pay in premiums goes up an average of 8 percent to 10 percent, according to Kumpuris.