Does life insurance pay out over Covid-19?
Thankfully, a vast majority of people make a full recovery from Covid-19, but as we know there has been many cases where people are not so lucky. If your Life Insurance policy is already in place, and your claim meets all the terms and conditions stated within your policy, it is reassuring to know you will receive a full pay out, but what if you don’t have an up-to-date policy?
Your first step should be speaking to your existing provider, or a specialist protection advisor. You don’t have to speak to us, but there’s a handy little button below to book a free consultation…
Can I take out a new life insurance or critical illness policy?
In short, yes! There are however, some new and stringent questions being asked when taking out a new policy covering your health in the last 3 months, with direct connection to the Covid-19 symptoms (for example, a new continuous cough, high temperature/fever or breathing difficulties, etc.). Plus, you may be asked if you have you had been advised within the last 3 months to self-isolate for any other reason.
Thankfully, the vast majority if people will have had no symptoms, but should you answer yes to these questions do not worry! It doesn’t mean you are unable to obtain new protection, it may just require an initial postponement period. This is normal procedure as it would apply to other conditions where the long-term recovery can be uncertain.
Many insurance companies have updated their underwriting approach as a result of Covid-19, and this has led to an impact on older customers with health problems. This could have an impact should you be trying to take out a new life policy whilst over the age of 60.
I have tested positive for Covid-19 and recovered, what’s the effect on my policy at application?
If you have had a positive test but have recovered and returned to your normal daily activities, you may be offered the following terms regarding your insurance policies: –
- Life Cover – Life Insurance standard rates are offered 1 month after full recovery
- Critical Illness Cover – The standard rates are offered 1 month after full recovery
- Income Protection – The standard rates are offered 3 months after full recovery
(applicable to the personal cover you hold)
This is not an unusual request as many long-term illnesses such as Meningitis, a recent heart-related chest pain, or even a sudden onset of epilepsy all require a postponement period to the relevant protection policies.
Should you have suffered more serious Covid symptoms and required hospitalisation, your insurance company may require a longer postponement period prior to your Life Cover Policy and your Critical Illness Cover being offered, although a specialist protection advisor would be able to guide you through all of these processes.
I have been in contact with someone who tested positive for Covid-19 and asked to self-isolate. What happens now?
If you have been told specifically to self-isolate due to a concern that you may have contracted coronavirus but have not shown any symptoms or had a positive antigen test, your application for Life Insurance, Critical Illness, or your Income Protection cover (as applicable) may be postponed. Once your self-isolation period has been completed and you have returned to your normal daily activities, the policy will come into effect or be continued upon approval by the provider.
Is coronavirus considered a critical illness?
Within most insurance policies, coronavirus is not specified as a ‘Critical Illness’ and the good news is that a vast majority of people who contract the illness will make a full recovery. Many insurance policies have a “Respiratory Failure” heading (or something along those lines), but it is the opinion of many Medical Officers that Covid-19 is unlikely to produce any permanent symptoms or impairment to lung function required to meet this definition.
Most claims are dealt with on their individual circumstances; therefore, it is important to be open and honest with all claims that are made to your relevant insurance companies.
If your Critical Illness insurance policy includes “Intensive Care” over a specified time, and your Covid-19 symptoms required you to be put on a ventilator in intensive care, and thankfully you make a full recovery; your claim should be presented and will be considered for payment.
I want to arrange protection, what are the next steps?
There are a lot of choices for protection, including life assurance, critical illness cover, and income protection. All of these and more could be a viable and sensible choice for you, but how do you know what to choose?
This is where a protection advisor will help. By speaking with an advisor about what you want to achieve, your budget and current circumstances, we can talk through all the options and present a recommendation. All you need to do to get started is give us a call or click one of the buttons in this article.
About the Author
The head of accounts, manager of mascots (Frankie, prince of the pups), Julie Bullen has been in the financial services industry for 30 years. Julie is usually at the front of house in our Wymondham office, working with clients and advisors to make your Warners journey as smooth as possible.