Life Insurance And Covid: Can You Be Denied Coverage?

The COVID-19 pandemic has raised questions about whether life insurance policies cover deaths related to the virus. While traditional life insurance companies have assured the public that COVID-19 deaths will likely be covered, there are a few exceptions. For instance, if the insured had an underlying condition but failed to disclose it, the insurer may deny the claim, arguing that the condition was the cause of death. Additionally, if the insured only had an accidental death and dismemberment policy (AD&D), which covers accidents, the claim may be denied as COVID-19 is an infectious disease. Overall, it is important to carefully review life insurance policies and consult with knowledgeable claim attorneys to understand the specific coverage and exclusions.

Inaccurate or incomplete applications

It is important to take your time when filling out an application and to ask questions if you don't understand something. Providing inaccurate or false information can result in a denial of the claim, even after the two-year life insurance contestability period has ended. This is because the insurance industry works on trust and proper disclosures.

In some cases, an incomplete life insurance application may result in the denial of benefits or only partial coverage. It is important to ensure that the application is complete and accurate before submitting it to the insurer. If there are any mistakes or missing information, the application may be rejected or returned to the writing agent.

Additionally, it is important to note that insurers use your current and past health records to determine eligibility and rates. Therefore, any previous medical condition, including long-term complications from Covid-19, can affect the cost and availability of coverage. Even if an insurer doesn't ask specifically about Covid-19, you will need to provide details about any related conditions, such as heart conditions, blood clots, or neurological symptoms.

Non-payment of insurance premium

Most insurers offer a grace period, often 30 or 31 days, during which policyholders can make late payments without losing coverage. Some insurance companies have extended this grace period in light of the COVID-19 pandemic. However, if the policy lapses due to non-payment of premiums and the policyholder passes away before the policy is reinstated, the life insurance claim will likely be denied. In this case, there is no coverage at the time of a COVID-related death, and the insurer is not obligated to pay out death benefits.

To maintain coverage, policyholders must ensure that their premium payments are up to date by the end of the grace period. Failure to do so may result in retroactive termination of coverage to the end of the month for which the last premium was paid. This means that individuals will lose their insurance coverage and become responsible for any medical bills incurred during the uninsured period.

It is important to note that the length of the grace period and specific rules regarding non-payment of premiums may vary depending on factors such as state regulations, whether subsidies are received, and the policies of the insurance company.

Uninsured risk under an unrelated life insurance cover

In the context of life insurance, an "uninsured risk" refers to a situation where the cause of death is not covered by the policy. This means that even if the policy is active and premiums are up-to-date, the insurer will deny the claim if the policyholder's death falls under an exclusion.

While traditional life insurance policies typically cover COVID-19-related deaths, there are certain types of life insurance policies that do not. For instance, critical illness policies only cover specific serious diseases or conditions, and since COVID-19 is a relatively new illness, it is often excluded from these policies. Unless the policy specifically includes COVID-19, any claim resulting from the disease will be denied.

Another example is Accidental Death and Dismemberment (AC&D) policies, which only cover deaths resulting from accidents and not illnesses. Therefore, if a policyholder with an AC&D policy dies due to COVID-19, the claim will be denied as it does not fall within the scope of the policy.

It is important for beneficiaries to carefully review the policy documents to confirm that their loved one's policy covers COVID-19-related deaths. Exclusion clauses and the list of covered illnesses or conditions vary across policies, so understanding the specific terms is crucial to avoid unexpected denials.

Additionally, it is worth noting that the presence of other pre-existing conditions or complications can also impact the approval of a claim. Insurers assess the risk associated with each policy application, and the existence of any medical condition, including COVID-19, is taken into consideration. While a COVID-19 diagnosis with no long-term effects may not affect approval, the potential long-term effects of the virus could influence the premium and policy options offered.

In summary, when considering life insurance, it is essential to carefully review the policy details, including any exclusions and covered illnesses, to ensure that COVID-19-related deaths are covered. The impact of the virus on an individual's health and the potential for long-term effects are important factors that insurers will consider when assessing risk and determining premiums.

Travel to a coronavirus hotbed

In March 2020, the world was in the grip of the COVID-19 pandemic. Countries were closing their borders, and travel was becoming increasingly difficult. One traveller, David, recounts his experience of trying to get home amid the chaos.

David's trip began in Miami, where he embarked on a journey to Bhutan, via Doha and Kolkata. At this early stage of the pandemic, the virus was largely concentrated in China, with relatively few cases in the US and none in Bhutan or India. However, David took precautions, wearing a Respro Techno face mask and carrying hand wipes, Clorox wipes, and hand sanitiser.

Upon arrival in Bhutan, David was screened for a fever and asked about his recent travel history. The first day of his trip went smoothly, but everything changed on the morning of March 6, when the first case of coronavirus was confirmed in the country: a 79-year-old American tourist. The mood in the country shifted from joyous to tense and concerned, and the government closed its borders to all foreign flights. David's itinerary had to be rewritten, and he could only visit the same places as the American tourist who had tested positive.

As the situation worsened globally, David's return trip became a race against time. He learned that India would close its borders to foreign travel within 24 hours, and the World Health Organization declared a pandemic. The US also announced a ban on all flights from continental Europe, adding to the chaos. David and his wife back in Miami were adamant that he needed to get out of Bhutan immediately and make it to India before the borders closed. With the help of his friends at MyBhutan, he managed to secure a last-minute flight to Kolkata.

David's journey back to Kolkata was a mad dash, as he dropped his remaining plans in Bhutan and rushed to the airport. The Kolkata airport, usually one of the busiest in the world, was like a ghost town due to the Indian border closure. He underwent thorough checks and had to fill out forms declaring his travel history and future plans. He made it to his hotel in Kolkata, intending to stay put until his connecting flight. However, he ended up exploring the city with a travel buddy, Carlos, filming travel episodes to ensure a steady income during the pandemic.

Precautions were evident in Kolkata, with people wearing face masks and hand sanitiser available everywhere. Restaurants checked customers' temperatures before allowing them inside. David and Carlos even asked a food vendor to use hand sanitiser before preparing their meal.

David's flight from Kolkata to Doha was sparsely occupied, and social distancing was implemented. The panic and fear were palpable, and everyone on board could feel the collective relief of making it to Qatar without any US bans on flights from the Middle East. The final leg of David's journey, from Qatar to Miami, brought him back home to his family. However, he was surprised by the lack of screening at Miami International Airport, raising concerns about the potential spread of the virus.

David's experience highlights the challenges and uncertainties of travelling during a pandemic. It underscores the importance of taking precautions, staying informed, and being prepared for sudden changes and disruptions.

Natural disaster exclusion

While Covid-19 is not classified as a natural disaster, it is still important to understand the implications of natural disasters on insurance policies.

Natural disaster insurance is not a standalone policy but rather a term used to describe a collection of insurance coverages included in a home policy that provides protection against natural disasters. Standard homeowners insurance policies typically cover a wide range of potential disasters, such as tornadoes, lightning strikes, and windstorms. However, it's important to note that certain common natural disasters like floods and earthquakes are often excluded from standard policies.

Homeowners in areas prone to flooding can purchase separate flood insurance policies through the National Flood Insurance Program (NFIP) or from select private insurers. Similarly, earthquake coverage is usually offered as a separate policy or an add-on to an existing homeowners or renters policy.

Other types of disasters that may be excluded from standard policies or require additional coverage include:

• Mudslides and landslides
• Hail damage in areas with frequent hailstorms
• Hurricane damage, specifically flood damage caused by storm surges
• Wildfires, especially in high-risk areas
• Extreme heat and droughts, which can cause foundation issues due to the shrinking and expanding of soil

It's important to carefully review your insurance policy to understand the specific perils covered and excluded, as policies can vary significantly. Endorsements or stand-alone coverage options may be available to fill in any gaps in coverage for disasters common to your area.

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