The conversation about life insurance is never easy — having to prepare for when the worst happens can be a tricky task.
Nonetheless, it is a conversation that those in their fifties and older should think about.
But as the coronavirus pandemic continues, the way life insurance policies are handled has changed. The world is a very different place than it was a year ago, and as such, there are a few things you should be aware of when buying a new policy.
Here, we look at a few questions you might have when buying a life insurance policy during the pandemic, and what you should look for when you’re browsing.
Does life insurance cover COVID?
One of the most pressing questions you might have when looking to buy life insurance will naturally be: does my policy cover coronavirus? The answer is yes.
If you already have a life insurance policy taken out before the pandemic, your policy will pay out if you are unfortunate enough to die as a result of coronavirus.
It should be noted that death from COVID is treated exactly the same as death from any other natural cause, as long as any relevant questions were answered fully and honestly on your original application, your premiums are up to date, subject to the policy terms and conditions.
Life insurance companies will honour all valid claims related to COVID, which could help towards any expensive funeral costs, and your loved ones could receive a cash sum too.
The Post Office, for instance, continues to offer term life insurance and over 50 life insurance and cover during the pandemic, and assures customers “that there are currently no changes to Post Office Term Life Insurance and Over 50s Life Cover in light of the coronavirus pandemic”.
Depending on the protection product you’re applying for, you may have to answer underwriting questions to be accepted for cover (including coronavirus-related health questions for Post Office Term Life Insurance). For other products, acceptance may be guaranteed without the need to answer any health questions at all, such as with Post Office Over 50s Life Cover.
When you are shopping for life insurance, make sure each provider clearly outlines whether or not they have added any stipulations related to COVID since the pandemic.
Will your life insurance policy exclude claims due to COVID?
In short, no it won’t.
While certain conditions are excluded from some life insurance policies (death due to drug or alcohol abuse, for instance), life insurance policies do not currently exclude death as a result of coronavirus.
However, there is a chance that life insurance will become more expensive. As there is likely to be more claims on life insurance as the pandemic continues, providers need to financially cover themselves for this. We will look at this in further detail next.
Will your premiums increase because of COVID?
As mentioned above, there is a chance that life insurance policies will become more expensive as a result of coronavirus. However, this will not affect existing fixed-premium policies once they have already started. Life insurance premiums are typically set at the time you start your policy, so they do not increase once it has started.
Even if life insurance providers look to recoup the risk associated with COVID-related payouts by increasing the price of future policies. This will only affect new policies taken out after the price increase.
Consequently, it is worth seeking out a life insurance policy sooner rather than later.
It is also worth noting that customers who are deemed more high-risk than others are likely to pay higher premiums than those considered low-risk. This helps the insurer to be able to cover paying-out on the likelier chance of death, and we’ll go into this further next.
Can you still take out life insurance if you have had COVID?
Thankfully, you can still buy life insurance if you have had coronavirus.
If the application includes health questions, then the insurer will likely ask if you tested positive for COVID or has experienced symptoms etc. in the past 30 days. If you have, your application will be delayed.
This delay period varies depending on which insurer you go with, and it can be anywhere from two weeks to three months. However, after you have fully recovered from COVID, your symptoms have ended, and the postponement period has passed afterward, you can then reapply for your policy.
Is it harder to get life insurance cover since COVID?
Thankfully, despite the pandemic, it is still possible to buy comprehensive and affordable life insurance policies.
However, the process for getting some policies has become more complex in some places.
Some products require underwriting questions to be answered, while others do not. Guaranteed over 50 life insurance do not require health questions to be completed, so the purchase process remains the same as before the pandemic.
For those policies where acceptance is not guaranteed (such as term life insurance, including Post Office Life Insurance), some life insurance providers have made the requisite pre-policy questionnaires more extensive, with questions concerning recent travel abroad, whether you are currently displaying any noticeable symptoms of COVID, or indeed whether you have been in contact with someone who tested positive for the virus, and so on.
This is to be expected — it is within life insurance providers’ remit to assess the potential risk of each new customer.
However, depending on how you respond to these questions, you may be subject to the aforementioned postponement period.
Further to this, the demand for life insurance policies has increased since COVID. Combined with a shortage of staff due to illness or isolation, the time your assessment takes may also increase as well.
In the same vein, some life insurance policies require a General Practitioner’s Report from your doctor before they can be processed. With the increased workload of GPs across the country, this will naturally take longer than usual.
Consequently, when looking for life insurance and you want a speedy resolution, you might wish to use a provider who uses virtual medical checks rather than conventional paper-based methods. This will get you your policy quicker, saving you time and stress in the long run.
Buying life insurance can be an uncomfortable task — but with the world being as it is today, it is all but necessary. But while the world has changed, your rights as a consumer remain. As you search for a policy, bear the above in mind and know what you are entitled to and find a policy that works for you.