Life insurers impose applicant waiting periods amid coronavirus outbreak

Life insurers in the U.S. are imposing 30-day waiting periods for applicants who have recently visited regions hardest hit by the coronavirus pandemic. 

The Lincoln Financial Group on Monday imposed a waiting period for applicants who have traveled to high-risk areas such as China, Iran and several European countries, Reuters reported.

American International Group (AIG) said earlier this month it would delay its decisions about life insurance applications from people with planned or current travel to China, Italy and South Korea until they have been back in the U.S. for 30 days.

AIG is adhering to warnings and recommendations from the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC), according to the report.

Anthony Martin, CEO of Choice Mutual in Reno, Nev., said there is an “extreme lack of data” surrounding the coronavirus.

“Life insurance companies hate unknowns more than anything else,” Martin said.

Tim Luedtke, an actuary and professor at Temple University in Philadelphia, said life insurance companies could take more extreme measures as the virus spreads throughout the U.S.

“I fully expect that they will stop taking applications,” Luedtke said.

As of Thursday, data shows 9,415 reported cases of COVID-19 in the U.S., according to Johns Hopkins Center for Systems Science and Engineering.

Credit rating firms AM Best and Fitch Ratings adjusted their outlooks this week for U.S. life insurers, changing their status from stable to negative.

Fitch reported there could be a potential spike in virus-related deaths that would significantly affect insurers’ earnings, reserves and capital, Reuters reported.

AM Best said it would conduct “stress testing” of insurers to see how the coronavirus could impact balance sheets.