Having insurance gives people a sense of security for both them and their loved ones. Whether it be health insurance, life insurance, or travel insurance, people want to know they have monetary security if something goes awry. In the days of the COVID-19 pandemic, people have many questions about the different forms of insurance. The pandemic could affect those with and without health, life, and travel insurance, but in different ways.
The Premise of Insurance
All types of insurance function on the same premise. Insurance companies assess the risk factors an individual has, put all of the individuals in a big group, assess the risk of the group as a whole, and base their pricing off of those risk factors. With health insurance, for example, patients provide the insurance company with their medical history and risk factors such as smoking, exercise level, alcohol use, etc. The insurance provider then makes calculations to estimate how likely the patient is to use their insurance. They then add everyone up, assess the overall risk, and come up with a price for the plan. Many insurance providers rely on having many low-risk customers to offset high-risk ones. Anything that increases the insurance company’s likelihood of paying out on claims makes their prices go up. This includes COVID-19.
Health Insurance
Health insurance is on everyone’s mind during this global pandemic. People want to know if their current insurance covers coronavirus testing and treatment. According to multiple press conferences with the federal government and private insurers, members’ coverage depends on their insurer. Because the United States does not have a single payer system, what is covered is more complicated than in other countries. For example, Medicare Part B completely covers testing for COVID-19. However, some private plans state that testing costs depends on the individual member’s plan. They state that unless the government supplements these fees, policy holders will pay them. Other private providers state that they will waive testing costs. Generally, treatment coverage depends on the individual’s original plan.
Life Insurance
Life insurance gives loved ones financial protection in the event that the policy holder passes away. People who already have life insurance do not need to worry. Even if the policy holder contracts COVID-19 or travels to a country with active infections and passes away, their policy cannot be died.
Those currently without life insurance may be wondering whether they should get life insurance now. As mentioned above, the pandemic increases risk for insurance companies. This may make them reluctant to offer new policies. What’s more, they may increase their premiums on new policies. Additionally, they may ask if the applicant has traveled to a location with active cases and, if so, charge a higher premium.
If an applicant wishes to avoid paying a higher premium, they could apply for life insurance after the COVID-19 outbreak has subsided. Theoretically, insurers may predict less risk then. Even if a person contracted coronavirus, as long as they recovered without any long-term complications, they could theoretically still get life insurance at the same price as others. If they had long-term health consequences, they would be assessed as a higher-risk applicant and would have to pay a higher premium.
Travel Insurance
Travel insurance can cover many different surprises during travel. Depending on the plan, this could include travel delays, medical issues while traveling abroad, and cancellations. With COVID-19, many people with previous travel plans may want to cancel them. Whether or not cancellation is covered depends on the type of plan the policy holder purchased.
Like health and life insurance, travel insurance prices and policies also depend on risk. Global travel can be stratified into different risk categories, Levels 1, 2, and 3. These levels are issued by the State Department. If the policy holder is planning on traveling to a level 1 or 2 country and would like to cancel their travel plans due to coronavirus, this is not covered under their insurance unless they purchased a Cancel for Any Reason plan.
Securing travel insurance for coronavirus now is difficult. Most insurers call coronavirus a “foreseen event”, meaning they will not cover travel changes due to it. Other plans, however, at least supply medical benefits for coronavirus under the travel medical plans.
Summary
Health, travel, and life insurance are industries that have been made more complicated by COVID-19. Consumers want better protection, but they are unsure what is covered by each industry. Contact your insurer to better know your policy.
Works Cited
“Coronavirus and International Travel Insurance.” Insubuy, www.insubuy.com/coronavirus-coverage-international-travel-insurance/.
“Coronavirus Test.” Coronavirus Test Coverage, www.medicare.gov/coverage/coronavirus-test.
Demos, Telis. “Coronavirus Is a Double Threat for Life Insurers.” The Wall Street Journal. Dow Jones & Company, March 11, 2020. https://www.wsj.com/articles/coronavirus-is-a-double-threat-for-life-insurers-11583875689.
Goldstein, Amy. “What Your Health Plan Will Cover If You Get Coronavirus.” The Washington Post, WP Company, 12 Mar. 2020, www.washingtonpost.com/health/what-your-health-plan-will-cover-if-you-get-coronavirus/2020/03/12/5349d5d0-646c-11ea-b3fc-7841686c5c57_story.html.
“Home.” TRICARE, www.tricare.mil/coronavirus.
Japsen, Bruce. “Health Insurers Widen Coverage For Coronavirus Screenings From Tests To Office Visits.” Forbes. Forbes Magazine, March 15, 2020. https://www.forbes.com/sites/brucejapsen/2020/03/15/health-insurers-widen-coronavirus-coverage-from-tests-to-office-visits-for-screenings/#4dff79093a66.
“Life Insurance and Coronavirus.” Policygenius, www.policygenius.com/life-insurance/does-life-insurance-cover-coronavirus/.
Scism, Leslie. “Coronavirus and Insurance Policies: What Is Covered?” The Wall Street Journal. Dow Jones & Company, March 15, 2020. https://www.wsj.com/articles/coronavirus-and-insurance-policies-what-is-covered-11584273600.
U.S. Department of State, U.S. Department of State, travel.state.gov/content/travel/en/traveladvisories/traveladvisories.html/.