Life Insurance and Covid-19

There’s no doubt that the coronavirus pandemic has taught us a number of valuable lessons, one of which is how financially vulnerable we are.

Many have witnessed first-hand how quickly life can change and perhaps been reminded of the importance of having financial protection in place.

If you’ve been motivated to take out life insurance since COVID-19, here’s what you need to know.

What is life insurance?

Life insurance pays out a lump sum to your family or other dependants if you pass away during the term (length) of the policy. It offers peace of mind that your loved ones would be financially protected if you were no longer around to provide for them.

Effect of COVID-19 on life insurance

While coronavirus has had a huge impact on the insurance industry as a whole, the life insurance sector has been left relatively unscathed. There has been no evidence of life insurers pulling out of the market, premiums have remained steady and COVID-related claims are being paid.

Life insurance is still readily available to buy and – whether new or existing – policies will cover coronavirus.

And, while the process of applying for life insurance is taking longer as insurers have been updating their underwriting processes, these issues have been largely resolved and application times have improved.

One undeniable change however, is the introduction of COVID-19-specific questions on life insurance application forms.  Insurers are asking a few more questions and underwriting has tightened in some areas, especially for those with diabetes, asthma or who might be overweight.

This means that when you run a life insurance quote, you’ll need to answer questions such as:

Within the last 30 days have you:

• tested positive for coronavirus?
• been advised to self-isolate?
• had any symptoms of coronavirus?
• been in direct contact with anyone who has been diagnosed with or who is suspected of having coronavirus?’

If you answer yes one or more of these questions, your life insurance application is likely to be postponed – how long for will depend on the insurer but it’s often around a month (after the point of recovery if you actually contracted the virus).

And if you have suffered particularly serious symptoms, for example if you were hospitalised, your application could be postponed for longer.

It’s crucial you answer these and all other questions honestly however, and don’t fail to disclose pre-existing conditions. If you ever make a claim and your insurer discovers you were dishonest, it may well be rejected.

Can I still get cover with a pre-existing condition?

The short answer is yes, but it will depend on the type and severity of the condition, and many insurers have become more selective about who they accept.

If your condition puts you at greater risk from COVID-19, such as asthma and diabetes, or you’re over 50 years of age, you may find it harder to get life insurance coverage, while those insurers that do offer cover are likely to charge higher premiums.

It is typical for the insurer to review your medical records from your General Practitioner before making an offer. You will also likely need to have a medical examination, called a paramedical exam. These usually only last around 20 to 30 minutes and involve answering some questions about your health and lifestyle, as well as having your height, weight and blood pressure checked, and having a blood or urine sample taken.

If you’re concerned you won’t be able to find coverage, it’s worth speaking to an independent agent, like Johnson & Rohan, whose experts will discuss your options and help find you the most appropriate coverage.  Our agency works with over 70 life carriers- we’ll find you the best available coverage and premium.