Life insurance in the age of COVID-19
As a young entrepreneur with no kids, Jesse Silkoff hadn't purchased life insurance before the coronavirus crisis.
“I just didn't think I needed it yet, and I've committed most of my financial resources to my business,” says Silkoff, 31, the president and co-founder of MyRoofingPal.com, an online marketplace that connects property owners with roofing contractors.
COVID-19, though, forced Silkoff to consider his mortality. “I don't want to leave my wife in debt should something happen to me,” he says. “Also, during the slowdown, I had more time to do the research.” So Silkoff purchased a 10-year term life policy with $500,000 of coverage for about $30 a month.
Nicholas Mancuso, life insurance expert at Policygenius, an insurance comparison website, says the site is seeing an “uptick” in life insurance searches. “Pandemics and major catastrophic events can serve as a catalyst for people to reassess their financial security, including life insurance.”
Mancuso says most people should get term life insurance over whole life insurance because, dollar for dollar, term gives you the most protection for your money. How much coverage you need, though, depends on your age, the size of your family, your health and your income.
When you're young, your life insurance needs are greatest because you're supporting a young family. “We generally recommend people insure up to 10 to 15 times their take-home pay,” Mancuso says.
If you haven't purchased life insurance yet, you can use an online calculator (such as the one at https://lifehappens.org) to get an idea of what your needs are and how much a policy will cost before you start shopping.
Mancuso advises using an independent agent to shop around. (Visit TrustedChoice.com to find an independent agent.) The cost for the same plan could vary by up to 40% among different providers, Mancuso says. You can get preliminary quotes from multiple insurers using websites such as AccuQuote.com, LifeQuotes.com and Policygenius.com.
If you don't feel comfortable getting a medical exam right now because you fear being exposed to COVID-19, Mancuso recommends opting for a life insurance policy with accelerated underwriting (also called “express underwriting”), which allows you to purchase term life insurance of up to $1 million without an exam.
“Accelerated life insurance is also a good option if you're young and healthy,” Mancuso adds.
Already have a life insurance policy? Talk to your insurance agent — you may need more coverage than you did when you purchased the policy, especially if your household expenses have increased.
Daniel Bortz is a contributing writer to Kiplinger’s Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.