Life Insurance And Covid-19: What You Need To Know

The COVID-19 pandemic has caused a lot of uncertainty and worry for people all over the world. Many have lost jobs, businesses, and loved ones. It is only natural that people have started to reflect on the more unpleasant elements of life and are seeking to provide security for their families in these uncertain times. One way to do this is through life insurance.

So, does life insurance cover coronavirus?

Life insurance policies cover death from any disease, including Covid-19

However, it is important to note that if you have recently travelled to any locations that are Covid-19 hotspots, it is imperative that you notify your broker. Moreover, if you have applied for a term life insurance policy and contracted Covid-19 during the application procedure, or have a history of foreign travel, your application might get rejected.

Furthermore, if you have bought an insurance policy recently and you hid the fact that you were Covid-positive before the policy came into action, the insurance company has the right to refuse your claims. Therefore, it is always advisable to re-examine your policy document and look for any clauses that state otherwise. When in doubt, call up your insurance provider and enquire about your policy.

If you contract Covid-19 after taking out a life insurance policy, your policy will pay out if you pass away

If you contract Covid-19 before taking out a life insurance policy, you may experience some difficulties in obtaining coverage. In this case, it is common for insurers to ask questions about recent travel to virus hotspots and whether you are exhibiting any symptoms. Depending on your circumstances, your application may be postponed until you have recovered or have more information about your health status. Additionally, insurers may look to exclude coronavirus deaths from new policies taken out after a certain date. Therefore, it is important to check with an advisor to understand the specific requirements and restrictions of different insurance companies.

It is worth noting that the majority of declined life insurance claims are due to the claimant misrepresenting facts at the application stage. Thus, it is crucial to be transparent and provide accurate information throughout the application process to ensure that your policy remains valid.

If you have Covid-19, you won't be able to take out a new life insurance policy until you've recovered

The Covid-19 pandemic has brought about a resurgence in the life insurance industry, with people buying term life insurance in record numbers. However, insurance companies are also facing challenges due to the high mortality rate associated with the virus. Reinsurance players, who provide cover for insurance policies, have asked insurance companies to implement a waiting period for individuals who have recovered from Covid-19. This is because the high mortality rate has impacted the reinsurance business.

The waiting period allows insurers to gauge the survival rate if a policy is being issued for a longer period. It is important to note that this waiting period only applies to new customers and existing policyholders will not be affected. Additionally, individuals with a history of coronavirus do not have to pay a higher premium unless there are price fluctuations related to age slabs and medical inflation.

If you are considering purchasing a life insurance policy, it is essential to be transparent about your health and travel history. Insurance companies determine the policy premium based on your medical conditions, and failing to disclose a Covid-19 diagnosis before the policy comes into action can result in your claims being refused.

Life insurance policies don't usually contain exclusions for pandemics

However, it's important to note that there are some exceptions to this. For example, if you contracted Covid-19 before your policy came into action and failed to disclose this, the insurance company has the right to refuse your claims. Additionally, if you're looking to buy a new life insurance policy, your application may be deferred or rejected until you've made a full recovery if you've tested positive for Covid-19.

Furthermore, while life insurance policies typically cover death from any disease, there are certain types of deaths that are not covered under term life insurance policies. These include death due to accidents, suicide, self-inflicted injuries, natural disasters, and sexually transmitted diseases, among others. It's crucial to carefully review the terms and conditions, as well as the exclusions, in your life insurance policy and clarify any doubts with your insurer.

Life insurance covers those who have had the Covid-19 vaccine and those who haven't

Life insurance policies will cover deaths due to COVID-19, regardless of whether the policyholder has received the COVID-19 vaccine or not.

Existing life insurance policies will cover claims arising from coronavirus-related deaths, as long as the policy was in place before the policyholder contracted the virus. Life insurance policies typically cover deaths from any disease, even those related to a pandemic, and do not consider vaccination status when deciding on claims.

However, if you are looking to purchase a new life insurance policy, your application may be deferred or rejected if you have tested positive for COVID-19 until you have made a full recovery. Additionally, your application may be affected by your travel history and plans, as well as your health status and any symptoms you may be exhibiting.

It is important to note that there has been misinformation spreading that claims the COVID-19 vaccine could void an existing life insurance policy. This is false, as clarified by state departments, insurance industry groups, and the American Council of Life Insurers. Life insurance companies do not consider vaccination status when deciding on claims, and the COVID-19 vaccine is not a reason for benefit denial.

If you are unsure about your specific situation, it is recommended to contact your life insurance company for direct answers and to review your policy thoroughly.

Frequently asked questions