With the news media reporting daily on the number of  COVID-19 cases and deaths, it’s not surprising that many  people are concerned about whether their families will  be taken care of if they contract the disease and die.  Defer Now,  Pay Later  If you took advantage of President  Trump’s executive order  allowing you to not pay Social  Security payroll taxes this year,  remember that you have to pay  back the taxes in 2021.

Trump’s order allows people  earning less than $104,000 per  year to stop paying Social Security  payroll taxes from Sept. 1 until  the end of the year. However, the  tax will have to be withheld and  repaid from paychecks issued  between Jan. 1, 2021, and April  30, 2021  The benefits are obvious for  anyone experiencing financial  difficulties during this pandemic.  Your employer usually takes out  7.65 percent of your wages from  Life insurance can be an easy  way for individuals to provide  financial support to  loved ones. There are two  main types of life insurance — permanent  life and term life.

Permanent  life coverage stays in effect as long  as you pay the premiums. It may also  accrue a cash value. In that respect,  it is like an investment coupled with  an insurance policy. Term life is pure  insurance (no investment component)  and covers you for a specific amount of time — usually 10 to 30 years.  Even though the pandemic has increased  the risk for life insurance carriers, individuals  who already have an inforce life insurance  policy should be covered (see below).  Here’s what you should know if you have  life insurance or you’d like to get life insurance  (or get more life insurance):

You Have a Policy

In general, if you have a life insurance policy  and you die of an illness such as COVID-19,  your beneficiaries will receive the death benefit.  While life insurance companies can have  exclusions for specific causes of death, like  participating in a high-risk activity or an act of  war, there are no exclusions for a pandemic  — even if you travelled to an area with a COVID-  19 travel alert.  However, there are some exceptions  when an insurer could decline a claim for a  COVID-19 death:

• You are not current on your insurance  premiums. Most insurers allow a grace  period of 30 to 31 days to make a payment.  If you do not meet the deadline,  your policy will lapse and if you die before  the policy is reinstated, your beneficiaries  will not receive a payout.

  • You did not tell the truth. It will not reflect on you favorably if you do not disclose information on your application about your  health, weight, travel plans and exposure  to the coronavirus. Insurers generally  closely examine claims and the initial application  when an individual dies within  the first two years of coverage.
  • You bought a policy that does not cover illnesses or diseases. Accidental death and dismemberment (AD&D) insurance covers  accidents. However, if AD&D coverage is  added to a standard life insurance policy  as a rider, then the traditional policy would  still pay out for a death from COVID-19.

You Do Not Have a Policy

You can still apply for life insurance. but  it might take longer to get approved depending  on where you live. Many insurance companies  are making the application process  easier by waiving the paramedical exam for  certain face amounts and utilizing electronic  applications.  One factor to take into consideration is  whether you recently traveled or are planning  to travel to an area with a high concentration  of COVID-19 cases. Consider waiting to send  in your application. If you test positive for the  coronavirus, the insurance company might  postpone any decisions on your application  for 30 to 90 days until you’ve made a complete  recovery.

This would also apply if you’ve  come in close contact with someone who has  COVID-19.  Keep in mind that if you are quarantining  in a state other than the state where you  permanently reside, you may be required to  fill out paperwork that matches the state you  currently are in.  It is still too early to tell how life insurance  companies are going to determine premiums  on new policies for people who contract the  coronavirus. It is assumed, though, that those  your paycheck (6.2 percent for Social Security  and 1.45 percent for Medicare).

For example,  if you’re making $10 per hour and  working a 40-hour week, then you’re taking  home an additional $100 per month.  There’s always the possibility that Congress  could forgive the taxes entirely, but  don’t count on that. For one thing, there  would be great concern that those who  took the opportunity would be unjustly  enriched compared to those who didn’t.  Most people and employers are not exercising  the option.  who developed a severe case of COVID-19  and experienced long-term effects will pay a  higher premium.

Older adults, or those who have certain  medical conditions that make them more susceptible  to the coronavirus, may find it more  difficult to get coverage. Some insurers have  adjusted their maximum applicant age and  insurable underlying health conditions making  it harder for some people to be eligible for  life insurance. If you run into that situation,  let us shop around for you. Not all insurance  companies have the same requirements.

The most important thing you can do is be  honest about your situation, including your  travel plans and exposure to COVID-19 during  the application process. If you decide to  “fudge” a bit, your beneficiaries may not receive  the death benefit even though you paid  all the premiums.  This is a good time to let an experienced  insurance broker shop around for you. Give  us a call.