How is my life insurance policy affected by Covid-19?
Rob Flynn
Staff Writer

Are you one of the many people wondering how the Covid-19 pandemic may affect your life insurance policy? Here we answer the most common questions being asked to try and put your mind at ease.

Since the pandemic began more than one year ago, hardly any aspect of society has escaped its impact.

And for life insurance policyholders, and those considering taking out cover, the spread of Covid has understandably caused considerable uncertainty and doubt.

One of the lingering worries many policyholders have is whether or not their existing life insurance cover will be worthless should they be affected by the virus.

In this article we’ll help to allay any of those fears and doubts, as well as cover the most important things you should know at present regarding life insurance and Covid-19.

So, one of the most important questions first...

Will my life insurance pay out if I die due to Covid-19?

Life insurance is a policy which pays out a tax-free lump sum upon your death. So if you die during the term of your policy as a result of the coronavirus it won’t have any effect on your cover - unless it has been specifically excluded by your insurer, though this is rare.

If you want to make double sure, get in contact with your insurance company to clarify.

How soon can a claim be made on my life insurance policy for Covid-19?

If you pass away due to Covid-19 a claim can be made as normal by your family, or whoever is making the claim. The claims process can begin once the death certificate is issued.

Does Covid-19 affect applying for life insurance cover?

Yes. Insurance companies will consider all aspects of an applicant’s health when determining their suitability for cover. As Covid-19 is an illness it will be taken into account by your insurer just like any other illness, especially if you have any underlying medical conditions.

What if I’m taking out life insurance cover and I contracted Covid-19?

If you've caught Covid, especially if within the last three months, you'll be asked some follow-up questions. If you tested positive or were a close contact of a positive case within the last 14 days, most insurers will place a one-month postponement on offering cover.

Once you have fully recovered, have provided relevant dates, and confirmed a return to full day-to-day activities, insurers will offer cover once you sign a declaration stating the same.

Insurers may ask Covid related questions in different ways but they will likely cover the following:

  • Did you or do you have Covid-19?
  • Are you currently experiencing symptoms?
  • Have you been tested/waiting on results of a test?

When applying for any type of insurance cover you should be 100% open and honest as it will affect your policy down the line if you fail to include important information.

Are life insurance policies more expensive due to Covid-19?

No, policies are not more expensive or loaded due to Covid. The cost of a policy will depend on several factors such as the type of cover you want, the length of your policy, and the amount of cover you require.

When would a life insurance policy not pay out for Covid-19?

According to insurance company Irish Life, one of the most common reasons for non-payment on a life insurance policy is due to non-disclosure of information, i.e when an applicant lies or fails to provide relevant information when applying for cover.

This can be anything from not informing an insurance company of an underlying condition such as diabetes, to giving false information such as saying you’re a non-smoker when you do in fact smoke. A lapse in premium payments can also render a policy null-and-void.

Where Covid-19 is concerned new applicants must inform an insurance company whether they’ve had the virus before and how long ago that was. A decision can then be made on whether cover is possible at that moment.

Therefore, as long as all the terms and conditions of your policy are met and you answered the medical questions in an honest and accurate manner you will receive a payout as normal should you pass away from Covid-19.

Should I take out serious illness/specified illness cover as an added layer of protection against Covid-19?

Covid-19 is not covered under any serious illness or specified illness policies at present as it’s a new illness.

However, if you develop a condition as a result of Covid that’s covered under your policy you can make a claim as normal.

Does my occupation make a difference to my life insurance application?

Your occupation will generally not play any part in determining your suitability for life insurance cover. Equally, your occupation or job title will most of the time not play any part in whether you get a payout in the event of a claim being made.

The only time you may be subject to a loading (a higher premium) is if you work at a particularly hazardous occupation, otherwise this generally isn’t a concern, especially where coronavirus is concerned.

If you are a frontline or health care worker - a nurse for example - your application or claim will be treated the same as everyone else so there’s no need to worry.

What’s the best policy to protect against Covid-19? 

There is no one life insurance policy that specifically covers Covid-19 as it is a new illness. The type of cover you require will depend on a variety of factors such as your age, health status, as well as whether you have a mortgage, family, and children in education for example. 

Chat to a financial advisor and they will help you choose the right policy for you. 

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If you have any more questions regarding life insurance policies, we’d be happy to help answer them. Comment below or get in touch with us on social media. We’re on Facebook, Instagram, and Twitter.