Wednesday, 24 June 2020

Industry Insights: Life Insurance and Coronavirus: Am I covered?

Industry Insights Series Q2 2020

Jessica Amodio, Financial Adviser

There cannot be a person out there right now who has not worried, even the smallest bit, about COVID-19. Amongst the long list of worries surrounding this pandemic, there is the prospect of falling ill and not being able to provide for your family. For many, this problem has always been at the forefront of their mind, and why they have now opted to take out life insurance.  

Life insurance pays your family an amount of money if you die while covered. When buying life insurance, the type, length, and cost of cover will depend on your personal circumstances. The cost of the cover will also depend on any current and/or previous health conditions. Previous health conditions disclosed at the time of commencing insurance are likely to result in premium increases and exclusions.  

Life insurance generally covers death caused by any condition, so there is no life insurance specifically for COVID-19, or any other pandemics like it. Those already holding life insurance would be covered for death caused by COVID-19, as it would not have been an illness previously disclosed on commencement. However, there are some life insurance providers which may include or exclude certain illnesses or diseases. Therefore, it is worth checking what exactly is, and isn’t, covered when getting a quote.  

Alongside life insurance, many people also have serious illness cover. This pays out a lump sum should the insured suffered from an illness or disease on a specified list. This list may vary depending on provider, with some covering more than others. Regardless of provider, you will probably find that COVID-19 is not on this list. The reason for this is that COVID-19 is not classed as a ‘serious illness’ in terms of their coverage. However, if you go on to develop a serious illness as a result of COVID-19, then this should be considered as a valid claim.  

Going forward, if you do not already have life insurance then it is possible to take out a new policy to protect yourself. It is likely that along with the extensive health questionnaire you would have needed to complete beforehand, there will also be additional questions. These will be questions such as whether you have already tested positive for COVID-19, whether you have had symptoms or have been told to self-isolate. If you have, then an exclusion may be applied.  

If you have any questions relating to life or serious illness cover, please do not hesitate to contact us so we can talk through your specific needs and circumstances.  

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