How Has Coronavirus Affected Life Insurance Policies?

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By Grace Hickman

on Monday 20 July 2020

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The Coronavirus pandemic has undoubtedly brought on many concerns for millions of people across the UK, particularly regarding their health and finances/financial situation, and on top of this, it has caused many to consider their own morality and what should happen to their loved ones if they were to unexpectedly pass away.

As a result, the life insurance industry has seen a significant increase in the number of people enquiring about cover and securing policies, in order to provide a financial security blanket for their loved ones.

There have been, however, many concerns as to whether or not it is possible to get a good deal on life insurance, and whether or not policies will cover you for Coronavirus, particularly if you’ve suffered with Covid-19 or you currently have it. 

In this guide, we aim to clear up any confusion by explaining what life insurance is, how the Covid-19 pandemic has affected existing and new policies, and where you should go to secure the very best deals.

What is life insurance and do I need it?

Life cover is an insurance policy designed to leave a lump sum to your loved ones in the event of your death, in exchange for monthly premiums.

There are different types of policies available, depending on your own personal needs and what type of protection you are after:

  • Whole of life insurance: Designed to last the whole of your life and will pay out no matter when you die.
  • Term life insurance: Policies set to last a certain period of time - many people get a decreasing term policy to cover their mortgage payments, for example.
  • Critical illness cover: Covers specific illnesses and will pay out if you contract one of the listed conditions, to help you while you are unable to work.
  • Over 50s life insurance: Designed for those over 50, with no medical check.

In most cases, policyholders will also purchase an income protection policy to protect their salary in the event of an injury or illness that stops them from working for a period of time, but it completely depends on what the individual requires, whether they are in full-time work or self-employed.

Read our guide on the Types of Life Insurance to learn more about the various policies available and how they work.

Alternatively, you can speak to an experienced adviser for free about the best option(s) for you; simply contact our friendly team today, obligation-free.

I’m young - is it too early to buy life insurance?

Being young is one of the main factors that lead to cheap life insurance premiums, so getting covered when you’re in your 30s and 30s is the best time!

Getting it as soon as possible will save you from higher premiums later on in life, when you are older and potentially more at-risk, which, in effect, increases the cost of cover.

Learn more: The Ultimate Life Insurance Guide

Will my existing life insurance policy be affected by the Coronavirus pandemic?

Most insurance companies in the UK have been adapting their policies and terms due to the Coronavirus pandemic, but if you already have a life insurance policy, it should not be affected.

If a policyholder passes away due to Coronavirus, their insurance company will pay out, as long as the claim meets the terms and conditions of their policy. 

Aviva has stated that they haven’t changed existing policies, and will still pay out in the event of a death caused by Coronavirus, subject to the terms of their policy. If you are unsure, however, we recommend that you contact your life insurance company to find out where you stand, as some companies may have different terms to others.

If you do have Coronavirus symptoms, we highly recommend staying with your life insurance provider and keeping the cover you already have, even if your health status changes. If you switch providers, you probably won’t get a deal as good as what you already have.

Your existing policy won’t be impacted by any new illnesses, which is why it is highly recommended that you purchase cover when you are healthy, to keep the cost down.

Critical illness policies

Insurers are very unlikely to cover Coronavirus in their critical illness policies, especially for existing policies. It is yet uncertain whether or not it will be added to future new policies, so be sure to check this with your provider if you’re purchasing critical illness insurance.

If, however, the policyholder should get Coronavirus and this causes the individual to contract a condition that’s listed within their policy, the insurance company will pay out - again, only if it meets the policy’s terms and conditions.

Learn more: A Complete Guide to Critical Illness Cover

What about income protection?

Your income protection insurance policy will not cover you if you need to self-isolate due to Covid-19.

However, if you are unwell and are unable to work, your insurer should be able to accept a claim on your policy.

If you are unsure where you stand with income protection, the best thing to do is speak to your insurer, as their terms may have changed.

I don’t have life insurance - Can I still buy it despite the pandemic?

Despite most UK life insurers adapting their terms and conditions due to the Coronavirus pandemic, you should still be able to purchase life insurance to protect yourself and your loved ones, but the process may be trickier, depending on whether or not you have had, or currently have, Coronavirus, and exclusions may apply.

Understandably, insurers have added more questions to their application process regarding the Coronavirus, such as:

  • Have you had a cough, fever or high temperature within the last 30 days? If so, have you tested positive or been diagnosed with Coronavirus within the last 30 days?
  • Have you had to self-isolate in the last 14 days?
  • Have you directly been in contact with an individual who may have, or has been diagnosed with, Covid-19?

If you have been in close contact with someone who has Coronavirus, the insurer will want to know if it has occurred from your occupation.

If you answer no to these questions during the application, you should be able to purchase life insurance as normal, subject to your other answers provided.

Additionally, if you have had Coronavirus, but you have been symptom-free for more than a month, then you should be able to purchase cover as normal, without exclusions or increased premiums.

If, however, you answer yes to any of the questions, you may be asked to reapply at a later date, or you may still be able to get cover, but it may come with exclusions, depending on your situation.

I have ongoing Coronavirus symptoms and/or I have been in direct contact with someone who has - Can I get life insurance?

Due to the vast amount of potential complexities surrounding Coronavirus, each life insurance applicant will be assessed on a case-by-case basis, so they may alter your policy based on your current health status when taking it out.

If you currently have ongoing symptoms, it depends what they are and how they are affecting you and any medical condition you may have, so the insurer will want to know more information and will underwrite your policy based on this. 

There may be some exclusions in your policy, such as respiratory illnesses,but the exclusions will be completely dependent on the individual’s case, and the insurer is completely entitled to apply any exclusions they see fit, based on the medical evidence provided.

Will my premiums cost more if I have Coronavirus symptoms?

Depending on your individual case, you may have to pay more for life insurance than you normally would have before the Coronavirus outbreak.

Premiums may increase by around 50% if you pose a higher health risk to the insurer, and in some cases, they could be as much as 100% more if the case is more serious.

Remember, it is extremely important that you disclose any pre-existing medical conditions, including Coronavirus symptoms, to your insurer when taking out life insurance with them, and you must be honest when answering all questions. Failing to do this will likely result in your policy being void or invalidated when it comes to claim, so your loved ones won’t receive a payout and your premiums will have been wasted.

Should I buy life insurance online? - Where should I buy it?

Whatever financial product you are buying, it pays to do your research and shop around for quotes - that way, you can compare a range of deals to see which one best suits you and your budget.

It’s possible to compare life insurance quotes online with comparison sites, but this is not recommended as it can be difficult to know what cover you need and how much cover you need without speaking to an expert and getting advice first.

A better way of doing this would be to contact insurance companies directly to get quotes and compare them, but that requires a lot of time and effort on your behalf.

How a life insurance broker can help

A life insurance broker can do all the hard work for you, as they have partnerships with many insurance companies and can scour the market for you to find the best deal. They will also know what type of cover is best for your situation and needs.

This also helps particularly if you have a pre-existing medical condition, like diabetes for example, where your premiums are likely to be higher, so getting a broker to look for you would be your best option for securing the most affordable deal.

At Unite Life, we are an insurance broker who works with a range of top providers in the UK, so this is something we can help with.

Protect your loved ones with Unite Life

As a life insurance broker with more than 10 years’ experience in the industry, we help people get the best deals on life cover so that they can rest easy knowing that their loved ones are protected should anything go wrong and it isn’t going to cost them a fortune every month.

If you’d like more information about what policy, or policies, would best suit you, you can speak to one of our experienced life insurance advisors now for free, and you are not under any obligation to get a policy if you don’t want to. Simply contact us online or call the phone number provided below.

You can read our resources on life insurance for further information, and we also provide a pension review and online will-writing service for those who want to consider protecting their finances and assets, as well as your future and that of your loved ones. 

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