As the COVID-19 pandemic accelerates we continue to monitor the situation across the many Life Insurance and Protection protection providers. From our interactions with the life companies we feel they are sympathetic to the pandemic and appear to be trying to accommodate the public.
We are not aware of any Covid 19 restrictions been applied by Insurers to their protection policies nor have we been advised of any plans to amend acceptance criteria.
Frequently asked questions
1. Do Income protection policies pay out for COVID-19?
Income Protection Insurance provides you with a replacement income if you cannot work as a result of an illness or injury after a certain period of time. You can take out income insurance if you are in full-time work or are self-employed and earn an income. Company Directors can also take out Executive Income Protection Policies. It protects you if you can’t work as a result of an illness being diagnosed, subject to cover. Income protection claims will not be paid if you become unemployed or your business ceases trading.
If you are diagnosed with COVID-19 and meet the definition of a claim, then you will be able to submit a claim. Claims will only be paid once the deferred period is reached.
2. Are there any travel restrictions across protection polices during this pandemic?
COVID 19 is a global pandemic. Aviva have confirmed that if you have travelled abroad and have no symptoms of the disease you can apply for cover. The standard travel disclosures on the application form apply. Travel has been restricted globally at government level.
3. Do specified illness policies pay out for COVID-19?
No COVID-19 is not a defined illness under a Specified Illness contract. We have not had evidence of a successful claim and can’t see one being made in the future.
4. Do Life policies pay out for COVID-19?
Yes Life policies cover our client should they become deceased from COVID-19. No insurers appear to have challenged this yet.
5. If a customer discloses that they have recently travelled to an affected area will they be accepted for new protection policies?
Normal underwriting will occur and underwriters will assess each case on an individual basis. It is a global pandemic. It knows no boundaries. It is of course an Irish problem but every country is effected.
6. If a customer discloses that they have tested positive for COVID-19 will they be accepted for cover?
Cover may be possible but would be postponed until a full recovery has been made. Some insurers will need at least 4 weeks to pass from date of being given the all clear. Insurers differ as per individual Corporate policy.
People will start to see payment holidays becoming the norm. Initial talk leans towards a 3-4 month holiday with the unpaid premium being paid over twelve months. We await confirmation.
Mortgage Protection plans
Certain insurers might freeze the cover if payment holidays of mortgages are awarded. The reason is to help cashflow for clients but also to maintain parity between the sum assures and the value of the mortgage. Certain insurers have said they might require sight of mortgage payment holidays before freezing mortgage protection policies.
More to follow …
Please note that any claim under an insurance policy is strictly subject to the terms of the policy itself. Policies differ per insurer and information provided here is a reference point only. Information, policies and procedures may change internally in the life companies without us knowing. The comments above are a general guide only and are based on information available to us.