Moneysense.ca: Life Insurance - Swine flu surprise
Alas we were right and the Canadian personal finance magazine
Moneysense has just run an article on the issue of Swine Flu and life
insurance, quoting me.
It's nice to see things early, but it's not so nice for those who
catch the Swine Flu and are unable to obtain life insurance for a year,
with small children at home.
If you are thinking of getting life insurance and have not yet had
the swine flu, move fast. Once you have the flu, it's too late as
anything less than full disclosure puts your policy at grave risk.
Be healthy, be safe.
Here's the Money Sense article:
Hundreds of thousands of Canadians could come down with the H1N1 flu
this season. If you're among them, and your brush with the deadly bug
motivates you to take out life insurance, get ready for a shock.
Insurance companies may treat you like you have the plague.
Lorne Marr, president of LSM Insurance in Markham, Ont., says that
insurance companies won't treat you differently if you have the regular
flu, unless you end up in hospital. But underwriters are breaking down
H1N1 applicants into three categories: those who currently have the
flu, those who had a mild case and recovered, and those who were
hospitalized. Those who have it now won't be considered for coverage
until they get better, he says, while those who have recovered from a
mild case have to wait two to three months. Those unlucky enough to be
hospitalized may not qualify for life insurance for a full year.
Marr's assessment is based on feedback from insurance industry
underwriters. But when contacted by MoneySense, several insurance
companies denied having such rules. One spokesperson told me I could
qualify for a policy even if I had the swine flu right now.
To check, I called her company's 1-800 number and asked to take out
life insurance. I pretended that I'd recently been released from
hospital with a bout with swine flu. After several back and forths with
an underwriter, the phone representative said the company wouldn't
consider me until two to three months after a doctor said I was cured.
"They want to see some stability before they make a decision," I was
told. "Who knows if you're more prone to getting it again." The good
news: assuming I did qualify for insurance later, I wouldn't be
penalized for having had H1N1.
To avoid such delays, Marr suggests that if you've been thinking
about getting life insurance, you may want to do it now, while you're
still healthy. If it's too late, and you need to get life insurance
right after a bout of the swine flu, your only immediate option is a
policy that doesn't require disclosure of any medical information. The
premiums on such policies, however, can be awfully steep —usually three
times as much as a normal policy.
Article by Rob Gerlsbeck