How can Covid impact your life insurance?
While most people make a full recovery from coronavirus, the pandemic has sadly cost many thousands of lives in the UK. At such an uncertain time, it’s only natural to think about your own wellbeing and life insurance could provide for your family, should the worst occur.
Life insurance can help to take care of your loved ones in the event you (the life insured) pass away. You pay regular premiums to an insurance company, in exchange for your family receiving a lump sum if you pass away. Different types of cover are available, depending on your circumstances.
What a positive Covid test means
The good news is that so long as you’ve made a full recovery and are in good health, a past Covid diagnosis shouldn’t usually stop you from taking out life insurance.
Your situation may be different if you’re currently infected with the virus or have only just beaten it.
Each insurer will have their own approach relating to Covid and some may ask specific questions about coronavirus when you apply for cover.
If you have an existing life insurance policy that pre-dates the pandemic, your family is still likely to receive a lump sum should you pass away due to Covid. It’s always worth checking with your insurer, but claims are likely to be paid if the conditions of the policy have been met.
The latest research from the Association of British Insurers shows £202 million was paid to families of people who passed away from coronavirus during 2020.
Will your life insurance be void if you get a vaccine?
Fake news reports have been written about many industries during the pandemic, and sadly life insurance is no exception. A range of social media posts and false documents have appeared, suggesting that getting a Covid vaccination will void people’s policies.
Despite what these reports say, being vaccinated shouldn’t stop you from taking out a life insurance policy – or making a claim. For further peace of mind, you can always double-check with your insurer.
Learn more about our approach to Covid.
How could Covid affect your critical illness cover?
You may also have the chance to add critical illness cover to your life insurance policy. This can pay out a one-off amount if you experience a serious medical condition, to help your family deal with essential costs.
Critical illness policies can help in coping with any long-term effects of Covid such as making adaptions to your home, or to help repay things like a mortgage, or pay off debts. They only cover a specific list of conditions, which normally includes cancer, stroke and heart disease. Given coronavirus is still a relatively new illness – and scientists are learning more about it each day – the list of ailments you’re covered for is highly unlikely to include it.
Although you won’t be able to claim for Covid infections, your policy could come in handy if the virus proves severe and leads to other serious health conditions which are on the list covered by your insurer.
What does coronavirus mean for income protection?
Income protection is another type of insurance for which the pandemic has caused confusion. These policies are designed to pay a portion of your income (for example, 60%) if an illness or accident means you are unable to work for a lengthy period.
Covid is usually a short-term illness, with a full recovery likely. The symptoms can be unpleasant, but often only last a few days or weeks. Income protection aims to protect your income if you're unable to work because of a long-term illness or an accident, and have a waiting period before you are able to make a claim, which usually lasts longer than the more short-term absences linked to Covid. So in these circumstances it's unlikely you'll be off work long enough to be able to benefit from your policy.
On the other hand, the virus can lead to major complications, such as severe lung and heart conditions. Your income protection policy may have a role to play if an initially mild coronavirus infection leads to something more serious that threatens your livelihood.
Maintaining a safety net
Insurance can offer a safety net for whatever life throws at you. With the ongoing uncertainty of the Covid crisis, it’s always worth checking your policy documents and catching up with your insurer to learn more about exactly what is and isn’t covered by your family’s policies.
Just get in touch if you hold a policy with LV= and want to know more, our team are more than happy to help.
What are the options if I can’t afford my premiums because of Covid?
It’s always best to contact your insurer directly if you’ve got any concerns about your payments.
The pandemic has hit many people’s finances, whether through a redundancy or illness. Insurers are aware of the challenges faced by their customers and may be able to offer solutions such as a grace period, if you are really struggling to make ends meet.
What costs can life insurance cover?
Your family would be able to use a life insurance payment however they wished if you were to pass away from Covid or a related condition. Childcare, rent and mortgages are just a few areas on which the lump sum could be spent.
How can I recognise Covid insurance scams?
The pandemic and vaccination programme have sadly created new opportunities for fraudsters. If you receive an unsolicited call claiming to be from your life insurer, you may want to take the caller’s name and other details.
You can then ring the insurance company’s switchboard directly to check if it was a genuine call.