In 2020 the impact of the Coronavirus pandemic changed the world – leading many of our clients to consider their options and really think about how to protect their families in the event of their death, or on diagnosis of a critical illness.
This short article covers the most common questions around Life Insurance cover and Coronavirus.
I’ve had COVID19 – can I still get Life Insurance?
In almost all cases, the answer is yes – and usually with no rise in cost. If you caught COVID19 and had a mild case then, after a month of no symptoms, the cost and level of cover offered by most insurers will be the same as someone who has never contracted Coronavirus.
The cover available for those who were hospitalised or put on a ventilator is a little more complex, but cover is still generally available.
As the impact of Long Covid becomes more understood, we would predict more changes for life insurance policies in the future – but currently there is little to no impact on the affordability of life insurance, critical illness and long term sick pay policies.
I’ve not had COVID19 but I’m high risk – will I be affected if I want Life Insurance?
There are changes to how insurers assess the risk factor of those perceived to be more vulnerable to Coronavirus. The two main areas are:
Higher BMI – cover for higher BMIs is getting more difficult, although still not impossible for BMIs up to around 40
Smokers – premiums have always been higher for smokers because of the added health risk. Many insurers will treat you as a non-smoker if you have not smoked or used nicotine products in the last 12 months. However, there was a recent announcement from one insurer that they will look at the last 5 years of smoking history and it is likely that others may also take this stance.
Is Coronavirus excluded from my cover?
Covid19 will not be excluded from your cover, even though it has been the source of many claims – it was the third most common cause of life insurance claims for Legal and General in 2020, and Royal London paid 2100 successful claims.
Is Life Insurance worth having? I hear worrying stories about claims not being paid.
There is definitely some cynicism surrounding insurance claims not being paid, but a quick look at Insurance companies’ claim statistics show that this is not the case:
Royal London Claim Statistics 2020:
· 99.6% of total claims paid
· 95.7% Term life claims paid
· 88.2% Terminal Illness claims paid
· 99.9% Whole of life claims paid
· 92.4% Critical Illness claims paid
· 93.1% Income Protection claims paid
Across the industry, well over 90% of all types of critical illness and income protection are paid and with life cover, that mostly increases to over 99%
Almost all rejected life cover claims are due to ‘misrepresentation’ – for example not disclosing significant medical details and pre existing conditions. For this reason, it is very important to read the questions carefully and declare anything relevant. The short term gain of a possibly lower premium is just not worth the risk of an unsuccessful claim.
2020 was a real lesson in expecting the unexpected. It’s never too early to consider your long-term financial security. Here at MAST, we offer free consultations and tailor our recommendations to support your financial protection goals for yourself, and your family.
To explore your Life Insurance options please contact us at Mast Financial Services - we can help you find the right policy for you and your family.