How Does Your Vaccination Status Affect Your Life Insurance Policies?

Contributing Author - Brennan Doherty

Can you buy life insurance without being vaccinated against COVID-19?

Life insurance brokers have heard this question in one form or another for the past two-and-a-half years. Some clients have worried getting a COVID-19 vaccine will make their premiums go up. Others fret about their rates climbing because they aren’t vaccinated.

Vaccination is undoubtedly the most effective way to avoid serious complications – or death – from COVID-19 infection. Leading scientists, doctors, and epidemiologists around the world have repeatedly confirmed the safety and effectiveness of COVID-19 vaccines. Even if they did raise one’s life insurance rates, the protection would be well worth it.

But life insurance clients aren’t entirely wrong for wondering whether vaccination (or not getting vaccinated) will impact their life insurance policy. After all, insurance companies ask prospective clients a lot of health-related questions when determining what to charge them.

Here’s everything you need to know about buying life insurance if you are (or aren’t) vaccinated against COVID-19:

Do Life Insurance Companies Ask About COVID-19 Vaccination Status?

Absolutely not. In fact, Canadian life insurance companies and brokerages who conduct medical examinations of prospective clients won’t ask you about your vaccination status for any virus, COVID or otherwise. “They’re not asking if you’ve been vaccinated, or if you’re going to get vaccinated,” says Lorne Marr, director of business development at HUB Financial. “That wouldn’t be a factor.” 

Nor will receiving a COVID-19 vaccine directly affect your life insurance premiums. The Canadian Life and Health Insurance Association, a body representing nearly the entire Canadian life insurance industry, spelled it out explicitly in a statement last year. “Getting the vaccine will not affect your insurance premiums,” it read. “No one should be afraid and choose to not protect themselves from COVID-19 because they are worried about it affecting their benefits.”

Insurance companies may still ask you a number of medical questions to determine the likelihood that they’ll need to pay out benefits – how ‘insurable’ you are. These are based on a number of factors, including pre-existing conditions, overall health, and lifestyle choices. But whether or not you’ve received a COVID-19 vaccine isn’t among them.

What Medical Questions Do Life Insurance Policies Ask?  

Medical examinations for life insurance policies are common in Canada. They can include a doctor’s examination, blood or urine tests, electrocardiogram (ECG), or saliva test – or, in the case of a ‘no medical life insurance’ policy, a questionnaire. Either way, insurance companies will ask for details about your health.

Insurance companies want to know about long-term health conditions that could affect your insurability, like cancer, HIV, liver damage, unchecked diabetes, or a serious cardiovascular episode like a stroke. All of these conditions carry the possibility of premature death, even in people who are medically stable or have gone into remission. Insurance companies may also want to know whether you’ve been hospitalized recently.

Your lifestyle also matters a lot to life insurance companies. Certain fields like construction carry a much greater risk of dying than engineering, for example – so the risk of a potential payout by the insurance company is much higher. Some hobbies, particularly extreme sports (think skydiving or free climbing) can boost your premiums.

Perhaps the single most common lifestyle choice flagged by life insurance companies, however, is smoking. Medical exams and questionnaires routinely ask about it – and the devasting long-term effects of nicotine may make it tough for smokers to get good life insurance rates.

Complications from a serious bout of COVID may show up on one of these medical exams, even though Canadian insurance companies do not ask whether you’ve been vaccinated against the virus. A recent hospitalization due to COVID (or another condition entirely) will catch an insurance company’s attention. So will a stroke or pancreatic damage – issues that can be caused by severe long-term damage from COVID.

It's true that life insurance companies don’t ask about whether or not you’ve been vaccinated against COVID-19. That doesn’t mean the decision to get vaccinated is irrelevant. Choosing to get the jab could have an indirect effect on whether or not you develop long-lasting COVID symptoms – and your insurability.

So Why Could COVID-19 Vaccination Matter for My Life Insurance Application?

All of the COVID vaccines approved for use in Canada – Moderna’s Spikevax, Pfizer-BioNTech’s Comirnaty, AstraZeneca’s Vaxevria, and Johnson & Johnson’s Janssen – reduce one’s chances of catching the virus in the first place. This could be important if you’re in a hurry to get coverage. Providers generally won’t accept an application from someone who is infected.

Vaccines, of course, also reduce the likelihood that you’ll develop long-COVID symptoms lasting more than a month by around 50 percent. People with at least two shots and a booster are far less likely to need medical attention, end up in the ICU, or die than their unvaccinated counterparts.

“If you didn’t get the vaccine and you developed COVID, and you developed a health issue related to it, that could affect your insurability,” Marr says. “Indirectly, that can have a big impact on your ability to get insurance down the road.”  

Complications arising from severe COVID could definitely show up on a medical exam. If an insurance company thinks it’ll impact your insurability, you may be charged a higher rate – or, if the long-term damage is serious enough, potentially force you to seek a life insurance plan that doesn’t depend on a medical examination.

But there are options if you need life insurance and a policy requiring medical examinations is just too costly, will take too long, or simply isn’t available to you.

What Are My Options If I Have COVID Complications, But Still Need Life Insurance?

First of all, there is every chance you may still qualify for life insurance that requires a medical examination even if you have severe COVID side-effects. If you don’t, or if that coverage is prohibitively expensive, there are a couple of alternatives.

One of them is no-medical life insurance. It doesn’t require a medical examination, but is typically more expensive (no-medical insurance premiums can be 50 percent higher than traditional life insurance policies) while offering less coverage overall. Under a no-medical policy, life insurance companies are essentially guessing whether or not you’ll die earlier than expected without data from a medical examination – therefore, you’re seen as a riskier client.

Another is guaranteed life insurance. Its biggest perk is its inclusivity – you will not be turned down by a provider because of any pre-existing health conditions. The downside is that these plans are even riskier than a no-medical plan because there is no way for a provider to refuse coverage. Their death benefits aren’t that big – typically a maximum of $25,000 to $40,000 – rather than a six- or seven-figure payout.

One last possibility, if you have minor but persistent pre-existing conditions, is term life insurance. These policies provides beneficiaries with a payout if you die between a set term. The Financial Services Commission of Ontario says term policies can be renewed after they expire – anywhere from 1 to 20 years, or until you turn 60 or 65 – but at a higher premium. However, term life insurance policies usually have premiums that are lower than traditional permanent policies.

Has the COVID-19 Pandemic Changed Insurance Premiums?

Surprisingly, no. As terrible as the human toll of COVID-19 has been in Canada – 36,000 dead and over 3 million recovered cases as of Feb. 16 – Marr says the pandemic hasn’t had a major impact on how the life insurance industry considers mortality. That said, the oncoming wave of premiums for insurance related to long-term illness or injury could go up.

Doctors have long warned that COVID-19 will be a mass disabling event around the world. Even those with relatively mild cases of long COVID could experience debilitating symptoms for weeks, months, or even years – rendering them unable to work. That could have a significant impact on how the insurance industry assesses clients, although Marr says the industry is still working out the details.

“A lot of people are getting sick, so that could have more of an impact,” Marr says. “You don’t know where things are going to go in the next two or three years. Are there going to be health issues that will continue on for multiple years?”

What Should You Know Before Purchasing Life Insurance?

Always speak to any licensed life insurance advisor before buying insurance. Major life insurance providers such as Manulife, Sun Life Financial, and iA Insurance Group all have advisors capable of walking clients through the fine print on a life insurance policy.

Marr says the first order of business for anyone looking for a policy – regardless of any health issues they may have – is to see how much insurance makes sense for you. Maybe that’s a slim policy with a $60,000 death benefit on a no-medical policy  – or it could be a $600,000 life insurance policy with an extensive medical examination. “Work with a broker who works with multiple companies who’s able to find you the best fit for how much you need,” he says.

One last well-worn piece of insurance advice? Don’t wait. Buying insurance of any kind at the last minute in an emergency is a major red flag for a broker – and may mean you, the client, end up without coverage at the worst possible time. Regardless of your circumstances, Insurdinary can help you find the best insurance rates and mortgage rates in Canada – as well as answers to your most pressing finance questions.