Personal insurance in the Covid 19 world
One of the more common questions I am receiving from clients with insurance is ‘am I covered for the coronavirus?’; I have life insurance, Total & Permanent Disablement (TPD) cover, income protection and critical illness cover, if I get sick can I claim?
While no one answer will cover everyone’s circumstances, the general rule is:
Income protection – in order to meet the conditions of a claim by policy definition you need to be temporarily disabled and off work due to injury or illness for a period of time exceeding the agreed waiting period. Unfortunately for many people the waiting period (between 30 days and 90 days) on their existing income protection policies exceeds the lifespan of the Covid 19 virus, meaning it is unlikely they will be incapacitated / off work long enough to receive a claim benefit.
- Involuntary unemployment – Some of the higher quality policies do have involuntary unemployment benefits which potentially can be claimed on if the life insured has ceased work due to Covid 19. This can include a waiver of premiums for a selected period of time. The advantage of this type of benefit is the life insured remains insured during the waiver period.
- Premium holiday – essentially you can keep your cover until you return to work, you do not pay premium during this period however you are not insured for this period either.
Let’s face it, we do not want to meet the conditions of a claim for the next two insurances:
A Life insurance claim to the Covid 19 (you are basically cactus) will either mean life insured has passed away or was considered terminally ill (and meets the specific criteria of a terminal illness claim which differs between policies).
For Covid 19 to meet a TPD condition the life insured would normally need to be totally and permanently disabled and unlikely to ever return to their current occupation or an occupation they are suitably qualified trained or skilled to complete, generally two independent doctors (one specialist, one GP) are required to sign off that the life insured cannot return to work again we might be stretched to make this criteria
I have not found a critical illness/trauma policy to date which Covid 19 would meet a specific claim event criteria to receive a benefit.
