COVID-19’s affect on new life insurance applications

The COVID-19 pandemic disrupted many industries. Life insurance wasn’t spared from that disruption. During much of 2020 and early 2021, it was difficult get a new life insurance policy, unless you were in superman-level heath.

After a long period of tightened underwriting related to COVID concerns, most insurance companies have relaxed their guidelines. That means that many people with health conditions that would have gotten them higher risk ratings, declined outright or postponed are now being issued new coverage again.

Carriers are adapting

Many insurance carriers have improved their underwriting process as a result of the challenges that COVID posed throughout the industry. At the end of the day, insurance companies make money by selling policies. Declining or postponing a higher number of applications caused a significant impact on revenue for many carriers. There was a need for carriers to adapt to this new and constantly changing environment so they could continue to manage their risk.

Leveraging big data

Many carriers have simplified their application and underwriting process to include more options that don’t require a physical exam. Many consumers are not very comfortable having strangers in their home these days, so it’s no surprised that “no exam” offers are very popular. With the amount of data that is currently available [ie. motor vehicle history, prescription history, MIB report] insurance carriers have access to much of what’s required to make informed decisions on applications.

That being said, all application and underwriting processes aren’t created equal. In most cases we’re talking about old companies. Most top-rated insurance companies have been around for decades, some over a 100 years. That can inspire trust in their ability to protect us and pay claims. But when it comes to making huge technological leaps, they’re not really positioned to execute well. That’s why tech-focused companies have emerged in recent years to offer simpler and quicker life insurance application and underwriting processes.

This has been happening in the home and auto insurance space for years now. Think Geico, Progressive and the like. Life insurance has been much slower to adapt.

Enter insurtech companies

At the forefront of what are coined “insurtech” companies is ETHOS. Partnered with top-rated insurance carriers, ETHOS is the underwriter and third party administrator on its proprietary policies. That allows the company to leverage its underwriting tech, which taps into big data, to quickly process applications. In many cases, applicants are approved for coverage immediately after answering a few health questions online.

Another slick feature is the soft decline. If you won’t qualify for their fully underwritten policy, the ETHOS application process will pivot to a different policy type. This is based on various factors and tailored to your overall picture. This process does not negatively impact your MIB report like a traditional decline does. Also, unlike many insurtech companies, the ETHOS process is not limited to the super healthy. There are options for most people under the age of 85.

Gallant Life Insurance has partnered with ETHOS to make it easier for you to apply for life insurance. They’ve turned a cumbersome process that has historically taken weeks or months into a 5-10 minute application.

The future is a simpler life insurance process

It’s doubtful that we’ll ever return to pre-COVID application and underwriting processes. And that’s probably a good thing. This pandemic seems to have given the life insurance industry a much-needed kick in the pants in terms of efficiency. In a time where we can purchase just about anything with a few clicks, why should we have to jump through a bunch of hoops and wait weeks or months for a response to a life insurance application?

Reach out to chat about your options if you’re in the market for new coverage, considering replacing an existing policy, or adding more coverage to what you already have.

Call me at 512-922-1273, or email me at danny@gallantlifesinsurance.com to discuss your options.

Prefer a self-serve option?

Our partnership with ETHOS allows you to get quotes and apply for coverage in 5-10 minutes!

No physical exam
No blood/urine samples
No phone interview
No need to speak to an agent

Just answer a few health questions online.
You may qualify for same day coverage!