In a few short weeks, the insurance industry has been overturned by the COVID-19 global pandemic. Insurers have been racing to mobilize solutions as fast as possible to minimize the disruption to business and service to their clients.
On one end, this pandemic has caused customers to think about mortality and financial security in a different, more immediate, way. We’ve seen an increase in Life insurance applications specifically. On the other end, there are significant bottlenecks in the industry that delay or even prevent customers from accessing the coverage they need in these trying times.
Several in-person medical services are being suspended across Canada to prevent overloading the system, reduce the spread and implications of the virus, and ensure the appropriate care is available to patients in need. This suspension also includes paramedical services, collecting fluids, ECG’s etc, that are often a required step in completing life and health applications.
Typically, paramedical and underwriting requirements need to be completed within a 90-day window in order to get a client’s application approved. If the requirements are not met within 90 days, the policy cancels and premiums are refunded to the client.
As such, carriers are looking for ways to increase coverage for products that offer “accelerated underwriting” – or in other words, products that do not have paramedical or laboratory testing requirements.
As an advisor, it’s important to stay up-to-date with new carrier offerings to ensure your clients get the coverage they need, and reduce the number of rejected applications. Thus, we’ve put together the following list of carriers and products that have higher coverage options available for accelerated underwriting products. It’s important to note that new information is added by the day, therefore the list below may not be fully comprehensive. We recommend that you check this resource page that our partner, Hub Financial, has put together to host the latest information (advisor login required).
Canada Life – Underwriting limit with no medical for people ages 18 to 40 has been increased to $2 million. For critical illness insurance, this limit rises to $250,000 for insured ages 18 to 40. In disability insurance, the monthly limit increases to a monthly benefit of $6,000 per month, for people ages 40 and under.
Canada Life also has a digital application process called eAccess to reduce paperwork and have a handy “non-face to face” sales guide to help advisors navigate virtual meetings.
iA Financial Group – Below is a snapshot of age and face amount available with no medical exam requirements:
- Life insurance: 0-50 years, up to $1 million
- Life insurance: 51-60 years, up to $300,000
- Critical illness insurance: 0-50 years, up to $200,000
iA has also has a range of products that have flexible underwriting standards, and has developed a new non-face to face sale process, specific to the Life and Critical Illness products below:
- Traditional term and whole life insurance (maximum face amount of $5 million)
- Critical illness insurance (maximum face amount of $2.5 million)
- Access Life
- Disability insurance, Superior Program, Universal Loan Insurance, CancerGuard,
- Acci 7 Plus and Acci-Jet Program
In terms of group insurance, clients on short-term disability as a result of being diagnosed with COVID-19 will receive immediate coverage, with no waiting period.
RBC Insurance – Offers a range of life and health products that do not typically require paramedicals, fluids and vitals. See below for the face amounts available:
RBC has also introduced the ability to reduce the coverage amount for new applicants only. If you’ve completed an application based on your client’s personal needs assessment, and the coverage amount requires vitals and/or fluids, advisors will have the option to reduce coverage to an amount that is within RBC’s no fluids/no vitals age and amount requirements.
Equitable Life of Canada: Has adjusted the standard age and coverage requirements for life insurance cases submitted on or after March 15, 2020. There are now no medical requirements for ages up to and including 45, on amounts up to and including $1 million.
Applications submitted prior to March 15th will be assessed on a case-by-case basis, and Equitable Life is working to develop further solutions for these cases.
Additionally, Equitable has temporarily revised its witness signature process. During the pandemic, forms may be processed even without the witness signature.
Sun Life: Recommends advisors use a tele-interview instead of a paramedical to initiate the underwriting process. To help speed up an application, they are encouraging advisors to include the name of your client’s doctor name and phone number for reference. Sun Life has also created a short list of situations that are “eligible” for Accelerated Underwriting:
- non-medical evidence is provided by tele-interview
- the insured age is between 18-40, and
- the amount to be underwritten is between $500,000 and $1,000,000
BMO Insurance is temporarily implementing changes to their Accelerated Underwriting program which will include the following:
- Tele-Interview for issue ages 18 to 50 up to and including $1,000,000 of coverage.
- Tele-Interview for issue ages 51 to 60 up to and including $300,000 of coverage.
- Issue ages 61+ will continue to follow published age & amount requirements.
If a case requires fluids and BMO is unable to obtain these requirements, they will continue to underwrite the file with the Tele-Interview and application, and provide a tentative decision subject to the fluids when the client is tested.
La Capitale – offers non-medical up to age 50 and up to $500K as long as an “evidence of insurability” form is completed and can be uploaded into their E-app.
Introduction of temporary risk selection rules:
- Life insurance: maximum coverage increased to $1 million for people ages 18 to 50;
- Critical illness insurance: maximum coverage increased to $250,000 for people ages 18 to 50;
- Disability insurance: with the Pillar series specifically, the maximum monthly benefit increases to $4,000 for people ages 18 to 45, to $3,000 for people ages 46 to 50, and to $2,000 for people ages 51 and up.
Assumption Life – Policy face amounts reduced to nonmedical limits until paramedical companies resume service or in-person visits:
- Ages 0-17: maximum $1,000,000
- Ages 18-45: maximum $499,999
- Ages 46-65: maximum $249,999
- Ages 66-69: maximum $50,000
- Ages 70+: case by case, but will most likely be postponed. Ages 0-17: maximum $1,000,000
Possibility of deferring premium payment by 60 days for the following reasons:
- Illness or quarantine
- Layoff or loss of job
- Absence from work to care for children or a family member who caught COVID-19
- Several other Canadian carriers have updated their submission processes to include non-face to face options for verifying client identities, collecting signatures, etc and have announced future updates to come regarding their approach to accelerated underwriting. Continue checking in with your MGA for the latest updates from individual carriers.
- We can expect to see a greater focus on questions about travel during the underwriting process. If your clients have recently returned from a trip (either international OR domestic) it’s been recommended to wait about one month after they have returned before submitting life or health applications. Clients should also not be showing any symptoms of COVID-19 at the time of submission. This will help reduce the number of declined applications.
- Check the Government of Canada website for active health and travel advisories, and the risk levels for the country in question (risk levels of 3 or 4 are considered high and insurance should be refused).
- As you are supporting clients with their search for life or health insurance, be sure to review the carrier’s underwriting requirements. This should provide you with an up-to-date understanding of what a realistic outcome should be while nurse visits and medical services are suspended.
Overall, the best thing advisors can do at the moment is to stay informed of the situation, be as transparent as you can with your clients and leverage digital tools and processes as much as possible. We’ll do our best to keep you informed as new information arises or changes. Please don’t hesitate to reach out with questions or comments.