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The COVID pandemic has had a huge impact on many aspects of our lives but some are more obvious than others. One area which is easily overlooked - despite being very important - is the impact COVID-19 could have on life insurance.
Here, we address some of the big questions around COVID-19 and how it's impacting life insurance, so you've got a better understanding of what's going on.
If you have life insurance, and you're one of the very unfortunate people who die as a result of COVID-19, your life insurance policy should pay out.
The Financial Services Council (FSC) confirmed this in 2020 when it released a statement as soon after the coronavirus outbreak was recognised as a global pandemic.
"There are no exclusions in existing life insurance policies that would prevent the policy from paying out for a death claim related to coronavirus, if you follow government travel advice," said the FSC.
"No-one should be concerned about their existing life cover and you can ask your life insurer or superannuation trustee what you are covered for."
The FSC has assured people with life insurance that their policies will pay out if they die due to COVID-19, as long as they followed. But what does that mean?
Well, on March 18 2020, for the first time in Australia's history, the government issued the highest level of travel alert, urging all citizens not to travel to any other country. Unfortunately, for people with loved ones overseas, international travel might still be a very real prospect.
However, if you do head overseas against government advice - for whatever reason - it's very likely your life insurance policy would no longer be valid. This is because, in the eyes of insurance companies, you're intentionally putting yourself in harm's way.
Unfortunately, this extends to income protection policies as well as Total and Permanent Disability (TPD) policies. If you are planning on travelling overseas, contact your insurer immediately so you can find out how your coverage might be impacted in the present, and when you come back.
Usually, it doesn't matter. You'll still be covered, even if you bought your life insurance policy after COVID-19 became public knowledge. However, there is an exception to the rule.
If you're a healthcare workers and you took out new cover between 11 March 2020 and 6 April 2020, you should check with your life insurance company or superannuation provider about any exclusions that may apply.
This is because some insurance brands may have exclusions during that time but, from 6 April, insurers were allowed to collaborate to ensure front-line healthcare workers didn't face exclusions.
This system is different to travel insurance, where insurers typically won't pay out for claims associated with the coronavirus if you bought your policy after COVID-19 became a known event.
Yes. You can still get life insurance which would cover you in the event you died from COVID-19. However, you'll probably have to let the insurance company know if you've been overseas recently, or if you've been in close contact with anyone diagnosed with COVID-19.
A statement released by life insurer NobleOak on 16 March confirmed the company is still offering coverage, but said each case would be assessed individually by its underwriting team.
"Our underwriting process requires clients to provide details of any past illness, during the application process," it said. "If they have COVID-19 like symptoms, their assessment may be deferred until they have been assessed and fully recovered."
Yes. You can still get life insurance if you're a healthcare worker, and you won't have to pay any more for cover just because you're at a higher risk of contracting COVID-19.
This is because the ACCC granted "interim authorisation" to let life insurers coordinate, so frontline healthcare workers aren't excluded from coverage.
This means exposure to COVID-19 can't be used as a reason to decline life insurance coverage, charge higher premiums, or apply risk exclusions, to frontline health workers.
The rule applies to workers including - but not limited to - doctors, nurses, hospital workers, ambulance workers, paramedics, people working at GP surgeries or clinics, people working on COVD-19 vaccines, pharmacists, police, aged care workers and volunteers supporting people with COVID-19.
ACCC Chair Rod Sims said the announcement was in the public's interest but said anyone looking for life insurance should still do their homework before committing to a policy.
"I strongly encourage everyone looking to purchase life insurance to first check the cover they may have under existing policies and through their superannuation fund," he said. "The authorisation does not include coordination on pricing, meaning customers should still shop around."
There's no way of knowing the long-term impact coronavirus will have on Australia's insurance market. However, we do know that the SARS epidemic of 2003 hit insurance companies hard. Such negative impacts could lead to increased premiums for consumers at a later date.
If you're thinking about buying life insurance, there's no harm in doing it now. It won't cost you more due to the coronavirus, but you will get cover if the worst happens.
Plus, there's a possibility that insurers will tighten underwriting criteria in the future, or even implement waiting periods for COVID-19.
Regarding vaccinations, these won't impact your life insurance policy. Finder confirmed this directly with 3 leading insurers in Australia.
You can, but there may be a delay with your insurance. If you're confirmed as COVID positive or are awaiting a test result, you may need to wait until you've recovered.
We'd advise you to get in touch with your insurer to find out what their specific rules are around COVID-19. Income protection's set up to offer ongoing benefits if you get sick or injured and can no longer work. Unfortunately, this may not cover the care needs of other people in your family.
No. You can still choose to buy insurance online or over the phone with a broker, without the need for any face-to-face meetings.
An adviser can help you find cover from trusted life insurance brands.
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