Life insurance and COVID-19

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At Buckingham James Financial Services we are increasingly getting asked by clients concerned about their life insurance during the evolving situation with COVID-19.

One of the most common questions we are asked is, can coronavirus (COVID-19) affect me taking out a life insurance policy?

The coronavirus (COVID-19) has naturally worried many of us and given rise to concerns and questions over how best to protect our loved ones in times like these.

Life insurance plays a vital role in ensuring you can provide a way of protecting your family and other significant others from a financial fallout following death for any reason including COVID-19.

However, no life insurance policy specifically states they cover the coronavirus. Life insurance is there to cover death caused by any condition, though different life insurance providers will offer cover for different medical conditions and some may include or exclude certain illnesses or diseases.

Therefore, always consult us at Buckingham James for professional impartial financial advice. We will check on your behalf as to exactly what is or isn’t covered. This applies to both existing and new applications. We are qualified to review your current life policies and ask your insurer on your behalf to verify the extent of your cover.

If you die from a disease such as a coronavirus during the term of your life insurance policy, then your beneficiaries may receive the payout, as long as all of the medical questions when making your original application were answered correctly.  There may be a need for your insurer to seek medical evidence during their assessment of the claims process.

Critical Illness Cover.

If you are considering taking out critical illness cover or serious illness cover, you may find that the coronavirus is not a specified illness that most life insurance providers will cover. 

Life insurance, critical illness, or serious illness policies often include cover for terminal illness for free. This ensures the policy pays out if life expectancy is 12 months or less.

Again, ask us to check with your insurance provider directly as to exactly which conditions for critical illness or the serious illness element on your life insurance policy covers.

Many insurers have made changes to their application process following the pandemic and may ask questions such as the following.

In the last 30 days have you,

  1. a) Had a new or unexplained continuous cough, fever or high temperature?
  2. b) Tested positive for, or been diagnosed with coronavirus/COVID-19?

In the last 14 days have you,

  1. a) Been self-isolating or been advised you should?
  2. b) Had direct contact with someone who has been diagnosed with, or suspected of having coronavirus?

You may also be asked if the direct contact is as a result of your occupation.

If you answer ‘yes’ to the questions above, your application may be deferred, for example up to 90 days after which you may be asked to reapply. Or your application may be passed directly to an experienced underwriter for a case by case decision.

In any event, it may be in your best interest to apply for life insurance at your earliest convenience following a discussion with Buckingham James, your local mortgage and insurance brokers based here in Brentwood.

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