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Life insurance and Covid-19; your questions answered

11.04.22

By Alan Boswell Group

Life insurance and covid

The pandemic has affected every aspect of our lives, in particular our attitudes to work, health and care. One question we’re often asked about Covid-19, is what impact has it had on life insurance – is it covered and how does it affect income protection and critical illness policies? We look at the consequences of the pandemic and what that means for both existing and new life insurance policyholders.

Does Covid-19 affect new life insurance policies?

If you’re taking out a new life insurance policy, insurers are now likely to ask Covid-19 related questions.

  • Have you had Covid-19 symptoms in the last four weeks?

  • Have you been instructed to self-isolate?

  • Have you tested positive for Covid-19 in the last month?

  • Have you been in close contact with someone who has tested positive for Covid-19 (or has had symptoms)?

If your answer is ‘yes’ to any of the above, your insurer may delay your application. How long they delay it for will depend on the insurer’s own guidelines, but it could be for at least a month, or up to three months if you had to be treated in hospital.

What happens if I need a medical?

Your application could also be delayed if your insurer needs you to have a medical. However, some life insurance providers are carrying out video screenings rather than relying on face-to-face assessments which can help speed up the process.

Is life insurance more expensive now because of the pandemic?

Premiums are affected by a wide range of factors based on you and your overall health, rather than what illnesses are circulating.

Essentially, the more likely you are to claim, the higher your premium. So, if (for example) you smoke, or you drink more than the recommended number of units each week, you’ll pay more compared to a teetotal non-smoker.

Read more: Guide to choosing a life insurance policy

Does Covid-19 affect life insurance for medical workers?

Medical workers looking for life insurance shouldn’t be disadvantaged simply because of what they do. In fact, the British Medical Association (BMA) and the Association of British Insurers (ABI) issued a joint statement to make it clear that every ‘application for life insurance and income protection will be assessed on an individual basis, regardless of profession’.

Bear in mind that if you are a healthcare professional and you have come into close contact with a Covid-19 positive patient, you may be asked more questions. For example, whether you were wearing any PPE (personal protective equipment) at the time of contact, but it should not affect your application otherwise.

How does Covid-19 affect existing policyholders and claims?

If you already have life insurance, Covid-19 shouldn’t have any direct impact on the terms of your policy. As long as all your policy conditions are met, your insurer should pay out if you need to make a claim.

Does life insurance cover Covid-19?

If you (or the person named on the policy) passed away because of Covid-19, your policy should pay out your loved ones and beneficiaries according to the agreed terms.

Does the Covid-19 vaccine have any impact on claims?

Whether or not you choose to be vaccinated shouldn’t have an impact on your policy or potential claims as vaccination isn’t compulsory in the UK. If you have an underlying health condition some insurers may ask if you have been vaccinated.

Does Covid-19 affect critical illness insurance or income protection?

Most insurers don’t class Covid-19 as a critical illness, so you won’t be able to claim if you get it. But, if you have Covid-19 and it develops into a critical illness covered by your policy, your insurer will pay out in line with their terms and conditions.

It’s a similar situation for income protection which is designed to support you if you cannot work because of illness. If you become severely ill because of Covid-19, you could make a claim for loss of income which your insurer will consider according to their guidelines. However, you probably won’t be able to claim for lost income if you have to self-isolate.

What are the reasons why life insurance won’t pay out?

The vast majority of life insurance claims are successful. That means you can be fairly certain that should you pass away, your beneficiaries will receive financial help.

However, the most common reasons why insurers might not pay out, include:

  • non-disclosure, which means you haven’t accurately provided the information asked for;

  • missed payments;

  • suicide (many insurers exclude death by suicide);

  • policy expiry (for example if you have term life insurance for a specific number of years and a claim is made after the term has ended).

If you’re struggling to meet premium payments, it’s best to speak to your insurer. In most instances, they will try and work with you and come to a temporary solution so that your policy continues.

Help and expert advice on life insurance

Few of us want to think about our own mortality. But if you’ve got a family or people that rely on you for financial support, it’s crucial to think about life insurance. Policies can help your beneficiaries to cover everyday living costs including household bills, childcare, rent and mortgage payments.

The policy you choose will depend on your own circumstances so talking it through with a specialist advisor can help to clarify what’s best for you and your loved ones.

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