Coronavirus (COVID-19) – Life Insurance

The outbreak of the coronavirus may mean you have concerns about your life insurance and whether you’re covered. Find expert answers here.

The outbreak of the coronavirus may mean you have concerns about your life insurance and whether you’re covered. Find expert answers here.

Mubina Pirmohamed
Insurance expert
minute read
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Posted 23 DECEMBER 2020

Coronavirus: a guide to life insurance 

Please note: The information in this article was correct at the time of publication on 23 December but, because of the impact of COVID-19, things are changing rapidly. We aim to keep this page updated. But check with your insurance provider or potential provider directly to confirm any details.

See government and NHS guidelines on how to avoid catching the COVID-19 virus and becoming unwell.

Does life insurance cover COVID-19?

Many existing life insurance policies could pay out for COVID-19 if you pass away from the disease, provided you completed the application truthfully at the time. It’s not one of the standard exclusions most insurance providers apply, so you could be covered.

However, some insurance providers introduced exclusions for pandemics on new policies after the SARS outbreak, so you need to check. Look at the cover and any exclusions in your policy documents, as these will help you understand what you are and aren’t covered for. If it’s not clear, contact your insurance provider for help.

Can I buy life insurance if I have coronavirus?

Some insurance providers have developed a series of questions related to coronavirus to ask new life insurance applicants. It’s possible that your application could be delayed if you’re currently testing positive for coronavirus and need to provide medical evidence – but that’s not to say you won’t be accepted for cover.

Common questions asked by providers may include:

  • Have you tested positive for coronavirus?
  • Are you self-isolating?
  • Have you experienced symptoms of coronavirus?
  • Have you been in direct contact with anyone diagnosed with or suspected of having coronavirus?

The provider may choose to delay a decision on your life insurance cover if you answered yes to any of their questions, but only until you’ve recovered.

What if I can’t afford life insurance payments due to coronavirus?

All UK insurance providers must seek to help customers who may be in financial difficulty as a result of coronavirus, thanks to guidelines set out by the Financial Conduct Authority (FCA).

The guidance follows the temporary measures put in place in May 2020, and since extended beyond October 31.

If you’re unable to keep up with your life insurance payments, speak to your provider. In some circumstances it may be able to:

  • Consider alternative products that better suit your needs
  • Reassess your risk-profile to see if lower monthly payments are possible
  • Provide help to avoid the need to cancel your cover

Although firms are now no longer required by law to proactively contact all customers who miss payments, they should still consider when it’s appropriate to make contact and offer support .

Is coronavirus a specified critical illness? 

No, this is a new strain of illness so it won’t be specified in critical illness policies.

But although it’s not a listed condition, if coronavirus led to one of the conditions listed on your policy, then you’d be eligible to claim. The vast majority of people who contract COVID-19 go on to make a full recovery.

Exactly what’s covered by critical illness insurance will depend on the specific details set out in the particular policy you take out. What's included will vary from provider to provider. But usually policies cover things like heart attacks, strokes, severe head injuries and some types of cancer. Mild versions of illnesses may also be excluded.

Always make sure you know exactly what you’re covered for when you choose a critical illness policy.

Does it matter if I’ve been abroad and contracted the virus? Will my policy still pay out? 

If you contract an illness when on holiday or working abroad you should be covered – provided a pandemic is not excluded in your policy – and subject to the usual claims-process checking.

Does it matter if I’ve caught it from someone who has been abroad? Will my policy still pay out? 

You should be covered, provided a pandemic isn’t excluded in your policy, subject to the normal claims process.

I run a business and have key person life insurance for my partner. Will this pay out should the worst happen? 

Yes. COVID-19 is a new illness so it’s unlikely it will be excluded from your policy. Check the policy documents so you understand what you will and won’t be covered for.

Could I have life insurance from my mortgage? 

If you have a mortgage, you may well already have life insurance to at least cover your mortgage costs.

How much a policy could potentially pay out will depend on the type of policy you chose. Some policies will pay out the same amount, through the entire length of your mortgage. With others, the sum that’s paid gets smaller as your outstanding mortgage decreases. Check your paperwork to see what you’re covered for and whether it’s still right for your current circumstances. It’s a good idea to do this regularly anyway, as things change in your life.

If your policy was linked to the length of your mortgage and you’ve finished paying it off, then you should be covered – providing your insurance policy is still in force. Check your paperwork to see.

The Financial Conduct Authority is currently proposing more support for mortgage payers affected by coronavirus. These include:

  • eligibility for two payment holidays of up to six months in total for people who haven’t already had a mortgage payment holiday
  • another payment holiday of up to three months for those who currently have a mortgage payment holiday or who have resumed payments after a payment holiday.

I think my employer gives me some life insurance. Is that possible? 

Some employees may have a form of life insurance from their workplace. This means families could receive a cash lump sum, usually a multiple of salary, if the employee dies during their period of employment.

This is a valuable benefit that many companies offer and some employees may not be aware they’re entitled to. It’s usually mentioned in your employment terms and conditions if you’re entitled to it. It’s typically known as death in service benefit, so look for that in any paperwork you received when you were recruited. If you’re not sure, check with your HR manager.

You usually have to nominate who you’d like your benefit to go to, so if your circumstances have changed, you might want to update any beneficiaries.

See more on business insurance and coronavirus.

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