COVID-19 and Its Impact to Life Insurance Companies

GUEST BLOG: Kurt Thomas, J.L. Thomas & Company, Inc.


COVID-19 has significantly impacted the life insurance industry.  Or as Mike Tyson would say it, “Everyone has a plan until they get punched in the face”.  This article summarizes the various punches in the face the life insurance industry has faced because of COVID-19.

Temporary Underwriting Guidelines

Mortality data is still emerging. The disease began as a respiratory disease.  Since then, we have learned it can cause serious complications such as cardiac, clotting, and renal issues.  Insurance carriers are closely following research and data to understand its implications on mortality experience and capital/liquidity needs. 

As a result, most companies are not offering coverage to older individuals and to those with certain medical conditions who have higher fatality rates with COVID-19.  Many carriers have adjusted their underwriting guidelines to:

  • Limit maximum table ratings available, such as Table 4 or 6
  • Temporarily postpone applicants over age 70

Foreign Travel

Many companies are postponing coverage for those who have had international travel or for those who plan on having international travel.  Some companies are loosening their guidelines as this article is being written.

Statement of Good Health

Nearly all companies are now requiring a Statement of Good Health at delivery. This statement asks the applicant if they have had any changes in health or if they have consulted a medical professional since the application date.  I think this form will be required on an ongoing basis for the foreseeable future.


Reinsurance Implications

Reinsurers have reduced their faced amount capacity in order to reduce their mortality risk.  They have also adjusted to changes to Accelerated Underwriting programs and third-party data.

Accelerated Underwriting & Alternative Medical Sources

Applicants do not want to meet with paramedical examiners right now.  As a result, more companies are offering “Accelerated Underwriting”. Carriers have increased face amount thresholds for accelerated underwriting, A.K.A., “lab-free” underwriting. We have seen increases to $2 to $3 million dollars. 

Medical facilities have shifted their priorities during the pandemic.  As a result, ordering APS records are taking longer than normal.  Insurance companies are attempting to use electronic health records in lieu of APS reports.  The process can take hours, instead of weeks, to obtain medical information.  Insurance companies are also using Rx reports, Lab history data, and predictive modeling to expedite the underwriting process.

E-Applications & E-Delivery

Advisors are not meeting with their clients in person because of social distancing.  Many have pivoted to video conferencing.  E-Applications and E-Delivery tools make the life insurance application process more efficient, reduces expenses, and enables faster cycle times.  Our firm has seen a 25% increase in the use of E-Applications and E-Delivery tools.

Grace Periods

Many companies have extended grace periods during this time for nonpayment of premiums due to COVID-19.


Fortunately, the insurance industry has taken the punch in the face well.  Most companies have adjusted their business procedures to ensure meeting financial liquidity and capital needs for its policyholders.  2020 has certainly been a dynamic year in terms of change for the industry.  As we enter a new normal, insurance agents should embrace these changes and find a new mindset to help the public purchase life insurance.


J.L. Thomas & Company is a family-owned insurance brokerage agency, now in its third generation. Owned and operated in the heart of Playhouse Square, Cleveland’s Theater District (second largest theater district in the United States). J.L. Thomas & Company was founded in 1971 by Jerry L. Thomas, CLU®. Jerry’s experience in the insurance business as both a personal producer and general agent gave him the insight to operate one of the country’s most respected brokerage operations.

A partnership with J.L. Thomas & Company Insurance Brokerage Agency makes it easier for you to help your clients achieve their insurance/risk management and financial planning goals. As an Insurance Brokerage Agency, J.L. Thomas & Company is committed to helping their brokers build their book of business by giving them the resources they need to effectively position life insurance, long-term care insurance, annuities, and disability insurance within their clients’ financial portfolios. Our lineup of insurance companies and their products, backed by our expertise, presents a winning combination for you and your clients.

Kurt M. Thomas, CFP®, CLU®, MSFS
J.L. Thomas & Co., Inc.