Pandemic: Finding Life Insurance Providers that Survive Infectious Disease

photo credit: Daquella manera

Outbreaks of resurging or new infectious diseases – many from foreign countries – kill more than 170,000 people in America each year. That’s a pretty scary statistic. Newly discovered global pandemics or even bio-terrorist attacks, are a real threat to the security of the nation. How would you be prepared for such a medical catastrophe should it happen? What would you do to protect your family in the case of a bio-terrorist attack? These are questions that our parents and grandparents didn’t have to deal with. It’s only in the past decade or so that these outbreaks have become a viable threat to our life.

Even the Plague Can Happen Here

Something as medieval as the plague can happen again. There have been recent outbreaks of pneumonic plague even in the United States. While the cases were diagnosed and quickly treated, there’s no way of predicting what would happen if it occurred in another country where the medical treatments couldn’t handle the problem quickly enough. The disease would spread at a phenomenal rate and eventually end up on our shore. Pneumonic plague is usually fatal in 65% of cases – even with proper medical treatment. Epidemics such as influenza, HIV, West Nile virus and SARS have become real medical threats in the past few years, with varying success of treating and slowing the spread of the diseases.

Recent studies suggest that as many as 60% of epidemics start when microbes pass from animals to humans. The National Institute of Allergy and Infectious Disease reports that the 1918-1919 influenza outbreak killed nearly 100 million people globally. In relation, the Black Plague of medieval times killed a mere 25 million people. The AIDS epidemic continues to spread, especially in developing countries where medical aid is almost non-existent. The SARS epidemic spread so quickly, that it infected 8,275 people and killed 775 – in just six weeks. The next emerging disease or epidemic will be the one that we least expect and are least capable of dealing with.

How will an Epidemic Affect Insurance

The Insurance Information Institute (III) found in their report, Pandemic: Can the Life Insurance Industry Survive the Avian Flu, that a moderate flu epidemic, similar to the flu outbreak of the late-60s would cost U.S. life insurers an estimated $15 billion – similarly, a severe epidemic, similar to the 1918 influenza outbreak could cost up to $155 billion.

Such an occurrence would have a severe effect on the industry, and many insurers would have asset depreciation to the point that they’d need to declare bankruptcy.

How to Choose a Life Insurer that Survives a Flu Pandemic

As you seek a life insurance policy in your class, you want to be aware of the financial strength of your insurer. The III report concludes that large life insurers, with solid balance sheets and a high AAA, Fitch, S&P, or A.M. Best rating could hold up to the rigors of an infectious disease outbreak. However, smaller companies will find themselves strapped, and may even end up unable to pay out policy benefits.

You also want to be sure that your life insurance covers you for infectious diseases, or death by illness. Most Accidental Death and Dismemberment (AD&D or ADD) policies will not provide benefits for infectious diseases. Still, by making sure that you’re protected with life insurance, you can ensure that your family is protected should anything happen to you in the way of a pandemic outbreak.

Tags: AD&D, financial strength, flu outbreak, infectious disease, Life Insurance, life policy, plague

This entry was posted on Wednesday, October 29th, 2008 at 12:27 pm and is filed under Causes of Death, Life Insurance, Stats. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.