Life insurers across the country are seeking to enforce waiting periods on applicants who have traveled to areas with widespread outbreaks like Italy, South Korea and China.
Lincoln Financial Group and American International Group Inc both announced they would delay life insurance decisions for 30 days on customers with planned or current travel to high-risk locations.
The industry has also delayed medical examinations for those seeking life insurance policies. ExamOne, a Quest Diagnostics Inc unit, said it is asking insurance applicants if they have been to “any restricted travel area” or taken a cruise, the company said on Tuesday. Those individuals must delay exams for 14 days.
According to The Wall Street Journal, to make enough money on policies sold, life insurers may need to charge much more, potentially deterring people who may otherwise now feel a greater urgency to insure themselves. Speaking to Reuters, Tim Luedtke, an actuary and professor at Temple University, predicted that life insurers would soon stop taking applications.
Credit ratings firms AM Best and Fitch Ratings this week revised their outlooks for U.S. life insurers from stable to negative as the global economic meltdown rattled U.S. life insurers.
The adjustment in ratings has to do with the “double whammy” life insurance companies could face in the following months as payouts surge and investment losses multiply, according to reporting from multiple outlets.
Source: Equities News