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 Life insurers were imposing waiting periods to buy cover in the
early stages of the pandemic for certain age groups, as well as for
those who had been infected, saying the long-term health
consequences of coronavirus were not fully understood.
But now that vaccines are prevalent in major economies such as
Britain and the United States, life insurers see fewer risks.
Helen Croft, head of underwriting strategy at AIG Life, said the
insurer had previously been more cautious in offering cover as a
result of the pandemic, but the efficacy and widespread use of the
vaccine meant it could provide insurance for more customers.
"The vaccine take-up has been excellent," she said. AIG Life did not
check if individual customers have been vaccinated, with Croft
pointing out the insurer did not ask customers about other
inoculations, such as for flu.
"I don't think it's necessary to be asking about the vaccine - the
population level take-up gives us enough comfort," she said.
Insurers such as LV=, Aviva and Zurich also said they did not ask
vaccination questions, with Zurich highlighting the possible
limitations of inoculation, such as long-term effectiveness or the
impact of new variants.
Regardless of vaccination status, customers with underlying health
conditions may pay up to five times the standard rate for life
insurance products, sources said.
A reduction in the hospitalisation and death rate as a result of
vaccination has meant that "almost all" insurers in Britain have
reversed previous COVID-19 restrictions on life cover, said Phil
Jeynes, director of corporate sales at insurance broker Reassured.
Britain was one of the first countries to roll out a vaccination
programme and almost 80% of all over-16s are fully vaccinated,
according to UK government figures.
Premiums have stayed much the same during the pandemic, Jeynes
added. Rather than raising rates, insurers postponed providing cover
for those above a certain age, with some underlying health
conditions or who were recovering from COVID-19, industry sources
said.
Life insurance premium volumes dropped by 11% in Britain and by 0.1%
in the United States in 2020, according to Swiss Re. Sharp falls in
household incomes due to lockdowns and job losses hit demand for
life insurance last year, the reinsurer said in a recent report.
Swiss Re expects strong life insurance growth this year and next due
to the economic recovery and increased consumer awareness of risk.
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 In the United States, where
more than half of the population is vaccinated,
major life insurers Prudential Financial and
Lincoln told Reuters they did not ask about
vaccines.
The Insurance Compact, standards adopted by 47
U.S. states, said it did not currently allow
insurers to ask vaccination questions as state
insurance regulation has not yet set public
policy around the vaccine and underwriting.
ASKING QUESTIONS
However, some insurers in Britain are asking customers whether they
have been inoculated, particularly if their health condition makes
them more vulnerable to COVID-19, and this could affect the cost or
size of their cover.
"For those that have been fully vaccinated, our risk appetite will
be higher," said Rose St Louis, protection director at Scottish
Widows. "We may be able to offer improved terms to those who have
had both vaccines."
Legal & General typically imposes a 12-month waiting period on
customers who are clinically vulnerable and where the impact of
COVID-19 may be life-threatening. "To avoid
postponing applications for this 1% of new customers, we will now
ask whether or not they have had their required vaccine
doses...allowing us to give cover to customers when it would
otherwise not be available," an L&G spokesperson said by email.
Unvaccinated vulnerable customers would be declined cover for now,
though allowances would be made for those who could not have the
shot for medical reasons such as pregnancy, L&G said.
Insurers need to get clearance from their reinsurers for any
underwriting changes they make, as reinsurers may otherwise be
unwilling to provide that cover.
L&G said its reinsurers agreed with its approach, without naming
them.
One global reinsurer, who declined to be identified, said it was
supporting the stance of "several insurers" in Britain who were
insuring customers in higher risk medical groups for larger amounts
of cover, if the customers provided evidence that they were fully
vaccinated.
Clive Allison, director, life and pensions at consultants EY, said
the need for vaccine questions may be short-lived.
"There'll be a convergence where most adults will have been
double-vaccinated," he said. "The ones that haven't are most likely
to be in the younger age bracket, and typically are not looking to
take out insurance cover."
(Reporting by Carolyn Cohn in London and Noor Zainab Hussain in
Bengaluru; Editing by Mike Harrison)
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