Life insurance is not something most people like to talk about, but with the coronavirus pandemic front and center, more and more Americans are purchasing policies. So, the question is - should you and is the investment really worth it?
"It's best to think of life insurance as just, you know, taking care of the people that you love," said Ben Moore, an insurance expert with Nerdwallet.
He says a quarter of Americans who purchased life insurance in the past year actually did so because of COVID-19. However, he says it's not something everyone needs to spend money on.
"If you have a spouse, who would need to continue paying mortgage payments... if you have children who are in college, and they need to pay college tuition," that is when you should consider it, said Moore.
The two most common policies are term life insurance and permanent life insurance.
Moore says term policies will be the cheapest option. They cover a person for a set amount of time. For example, 20 to 30 years and then they will no longer payout.
"People usually use it to cover things like a mortgage, that does have an end, there's an end to the mortgage payments," said Moore.
Permanent policies will cover someone for the remainder of their life. They will also cost more; however, they do build cash value that can be used while a person is still alive.
In both cases, age and medical history influence what you pay and if you qualify.
Moore says there is a third option that is easier to get - funeral expense insurance. It covers the basic costs of burial and services.
While policies do offer peace of mind, not every policy covers a COVID-19-related loss.
Moore says there are three main exceptions:
- Your application is inaccurate or incomplete.
- You missed a premium payment.
- You purchased an accidental death policy.
Moore says some insurance companies have slowed down how they process applications because of a lack of long-term COVID-19 research. He says if you've had the virus, it could play a factor in qualifying for a policy.
To compare policies, Nerdwallet offers a comparison tool here.
