Life Insurance And Coronavirus: What's Covered?

The COVID-19 pandemic has brought about a lot of uncertainty, and many people are concerned about their family members and loved ones. With the onset of a global pandemic, people are forced to ask tough questions, such as What will happen to their loved ones if something happens to them? and Will a life insurance policy cover them if they die due to COVID-19?.

The short answer is yes; life insurance policies cover infectious diseases, and COVID-19 falls under this category. Most leading insurers have confirmed that they will pay out a life insurance claim if the policyholder dies due to COVID-19. However, there are some important details to consider, such as travel history, health status, and the specific terms and conditions of the policy.

Existing life insurance policies will cover coronavirus-related deaths

If you have an existing life insurance policy, it will most likely cover coronavirus-related deaths. Life insurance policies have covered infectious diseases (of which COVID-19 is one) for many years. Most leading insurers are explicit about how customers can make a claim related to the pandemic. For instance, NRMA states that there are "no general exclusions for the coronavirus in any of our individual Life Insurance policies." This is echoed by other insurers such as Asteron Life Insurance and ahm.

The Financial Services Council (FSC) confirmed that there are "no exclusions in existing life insurance policies that would prevent the policy from paying out for a death claim related to coronavirus, if you follow government travel advice." This means that if you have an existing policy in force and you contract COVID-19 and subsequently pass away, your life insurance policy should cover you.

It is important to note that this applies to policies that were taken out before contracting the virus. If you attempt to take out a new life insurance policy and have recently travelled to virus hotspots or are being investigated for the virus, there is likely to be a postponement of the underwriting decision until the insurer has more information. Your circumstances, including your current health and any symptoms you may be exhibiting, will also be taken into account.

For policies purchased within the last 1-2 years, your application may still be in the contestability period while the insurer reviews your application. However, as long as you were honest about your travel plans and health, you should not have any issues with your claim.

In summary, existing life insurance policies will most likely cover coronavirus-related deaths, provided that the policyholder followed government travel advice and was truthful about their travel plans and exposure to illness during the application process.

New life insurance policies will also cover coronavirus-related deaths

If you are considering taking out a new life insurance policy, you may be wondering if it will cover coronavirus-related deaths. The short answer is yes, new life insurance policies will cover coronavirus-related deaths. Here is what you need to know about new life insurance policies and coronavirus coverage.

First and foremost, it is important to understand that life insurance policies have covered infectious diseases, including COVID-19, for many years. Leading insurers have confirmed that there are no general exclusions for coronavirus in their individual life insurance policies. This means that if you take out a new life insurance policy, you will be covered in the event of a coronavirus-related death, assuming you followed government travel advice.

However, when applying for a new life insurance policy, you may be asked questions about your travel history and any potential exposure to the virus. Insurers may postpone their underwriting decision if you have recently travelled to areas with a high risk of coronavirus transmission or if you are being investigated for the virus. They may also require you to provide a statement of good health if someone in your household has travelled to high-risk areas or been in close contact with someone who has tested positive for coronavirus.

It is crucial to be transparent and honest when applying for life insurance. Failing to disclose relevant information, such as travel plans and health status, could result in your policy being cancelled or your claim being rejected. As long as you are truthful and follow government travel advice, your new life insurance policy should cover coronavirus-related deaths.

Additionally, it is important to note that the cost of life insurance has not generally increased due to the coronavirus pandemic. The pricing of term-life insurance is at its lowest in over 10 years, and your travel history should not affect your premium, although it may impact the application process.

In summary, new life insurance policies will cover coronavirus-related deaths. However, it is essential to be honest and transparent during the application process and to follow government travel advice to ensure that your policy remains valid.

Life insurance companies may defer or reject applications if the applicant has tested positive for COVID-19

Life Insurance and COVID-19

The COVID-19 pandemic has had a profound impact on various aspects of our lives, including our insurance policies. Many individuals with existing life insurance policies have expressed concerns about whether their insurance covers COVID-19-related deaths. Additionally, those seeking to purchase new life insurance policies wonder if their applications will be affected by the pandemic. Here's a comprehensive overview of how life insurance companies are handling applications and claims related to COVID-19.

Deferral or Rejection of Applications for COVID-19 Patients

Factors Influencing Application Deferral or Rejection

Several factors come into play when an insurance company considers deferring or rejecting an application due to a positive COVID-19 test. These factors include:

• Health Status and Medical History: Insurance companies scrutinize the applicant's current health status and medical history, including any complications or long-term effects resulting from COVID-19. They may request additional information or require a waiting period before making a decision.
• Travel History: Life insurance applications typically inquire about recent travel, especially to areas identified as COVID-19 hotspots. Failure to disclose such travel plans may result in the rejection of the application or future claims.
• Symptoms and Treatment: Applicants who are experiencing COVID-19 symptoms or are under investigation for the virus are more likely to face deferral or rejection. The presence of symptoms or ongoing treatment indicates an active infection, which may pose a higher risk to the insurance company.
• Underwriting Process: The underwriting process involves a detailed analysis of the applicant's medical history and current health. Insurance companies use this process to assess the eligibility and rates for coverage. During this process, they may discover COVID-19-related information that influences their decision.
• State Regulations: While there are no specific state regulations prohibiting insurance companies from underwriting against COVID-19, individual states may have varying guidelines that impact the decision-making process.

Recommendations for Applicants

For individuals who have tested positive for COVID-19 and are considering life insurance, it is essential to be transparent and provide accurate information during the application process. Hiding a positive COVID-19 test or related medical history may result in future claims being denied. It is advisable to wait until you have fully recovered from COVID-19 before applying for life insurance. Additionally, working with an experienced life insurance agent or broker can be beneficial, as they can guide you toward insurers and coverage options that align with your specific circumstances.

Life insurance companies may postpone new applications if the applicant has travelled to a virus hotspot

When applying for life insurance, the applicant will be asked about their recent travel history, usually within the last year, as well as any future travel plans for the next 12 months. This is because travel to certain locations, especially those deemed virus hotspots, can increase the likelihood of contracting an illness and pose a greater risk to the applicant's health.

If an applicant has recently travelled to a virus hotspot, the insurance company may postpone the underwriting decision until they have gathered more information and can fully assess the risk. This could include waiting for any required tests to be completed and returned with clear results. The application process may also be affected by the applicant's current state of health and the presence of any symptoms.

In addition to travel history, insurance companies will also consider an applicant's medical history, family health history, lifestyle choices, and financial situation when determining the risk and setting premiums. It is important to note that dishonesty or omission of relevant information during the application process can result in issues with coverage or even application denial.

Life insurance companies may postpone new applications if the applicant is awaiting test results for COVID-19

Life insurance companies may postpone new applications if the applicant is awaiting COVID-19 test results. This is because insurance companies determine premiums based on an applicant's medical conditions and health. If an applicant has contracted COVID-19, their application may be rejected or postponed until they have made a full recovery.

In addition to health status, insurance companies also consider travel history when determining premiums. If an applicant has recently travelled to a country with a "Do Not Travel" advisory, their application may be rejected or postponed. This is because insurance companies view travelling to high-risk areas as putting oneself in harm's way.

It is important to note that the criteria for life insurance applications are subject to change at any time. Different insurance companies may also have varying criteria, with some being more accepting of applications from individuals with health issues or recent travel history.

If an applicant is awaiting COVID-19 test results, it is advisable to be transparent and disclose this information to the insurance company. Hiding such information may result in future claims being rejected.

Frequently asked questions