Does Life Insurance, Critical Illness and Income Protection cover Coronavirus?

Does Life Insurance, Critical Illness and Income Protection cover Coronavirus?

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Despite recent tactics to flatten the curve including a nationwide lockdown, the coronavirus continues to spread across the UK. Some areas such as London are being impacted more than others and more than 20% of the cases were recorded in this area. During this unprecedented global health pandemic, you might be concerned about your health and whether you can protect your dependents if you are impacted by the coronavirus. Can you still benefit from life insurance, critical illness or income protection policies? 

Life Insurance 

CoronaVirusLife insurance policies provide payouts in the event that you pass away. If you already have a life insurance policy in place, many businesses including Aviva are committed to paying out death claims that are due to coronavirus infection. As such, the claims policy for this business is not changing.  However, if you are keen to set up a life insurance policy now, you will be asked different questions related to COVID-19. This includes whether you have tested positive for the coronavirus or if you are self-isolating due to symptoms. You will also be asked whether you have been in contact with someone who has been confirmed to have the coronavirus. Finally, you will be asked whether you are displaying symptoms. Be aware that this will not necessarily rule you out when being considered for a life insurance policy. Instead, you will be referred to a member of the insurance team for consideration based on your individual circumstances.  At the present time, there are no exclusions for policies related to the coronavirus. 

Critical Illness 

Critical IllnessCritical Illness cover may be slightly different. It is important to note that the coronavirus is not an illness that is covered for critical illness policies. However, in many cases, deaths due to the coronavirus are caused by complications that lead to other conditions. This includes:
  • Kidney failure 
  • Liver failure
  • Heart failure
If this occurs, then the claim will be met. Again, this will be subject to key terms and conditions within the policy. Companies like Zurich will assess claims like this based on individual circumstances. 

Income Protection

One report has suggested that at the peak of the coronavirus 1/5 of the UK population will be unable to work. Income protection is designed to provide financial support if you are unable to work due to poor health. However, you will not be able to claim for other reasons including ordered self-isolation by a company or the government.  Income ProtectionIf you have an income protection plan in place, then you will be able to claim if you are unable to work due to poor health, caused by the coronavirus. This will be the case as long as you are past your deferred period. This will start from the beginning of your 14-day self-isolation period if you are unable to work due to coronavirus symptoms. Cases will always be assessed on an individual basis to determine whether the right level of support can be provided.  In the case of receiving a payout for income protection due to self-isolation without symptoms, the Association of British Insurers claims policies will only pay out if an individual has been advised to isolate by a medical professional. This means to claim, you would need to provide evidence.  It is also worth noting that according to Compare The Market 95% of providers are no longer providing loss-of-income cover for new accidents, unemployment or sickness policies. However, the business is not currently naming specific brands that have made this decision. 

Are These Policies More Expensive?

According to experts, life insurance, critical illness, and income protection prices are not expected to rise throughout the coronavirus crisis. Instead, prices are expected to remain constant. This is particularly true if you are young and in good health. All insurance providers claim that their application process is the same with slightly more questions asked to determine whether someone has been impacted by the coronavirus.  It is worth noting that you may be asked about your future or past travel plans. This should not impact the cost of your policy and has been part of the application process since before the coronavirus.  Some companies including Zurich have changed their position here. If you have returned from a category 1 country including China or South Korea, your application will be postponed. 

Are Medical Exams Moving Forward? 

In most cases, medical exams are moving forward. However, there are reports of some clients being wary about taking a medical exam right now. Due to this, businesses are considering offering an extension on when a medical exam can be completed. 

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