With the spread of COVID-19 around the world, it is no surprise that people have queries about their existing life policies and that we have seen an uplift in applications in recent weeks. People have also been asking specific questions. Is it still possible to get life cover? Will my existing policy cover COVID-19? Will my premiums increase?
In this article I want to give you answers to many of the common questions I am being asked at this time.
Will my existing policy cover COVID-19?
Yes, it will. Your life policy should pay out in the event of death for almost any reason. A global pandemic is not an exclusion on life assurance policies. The good news is that the vast majority of people who contract this illness go on to make a full recovery but if someone is insured and sadly passes away, life assurance would pay out.
The majority of deaths so far have been for people with underlying health conditions or the elderly, two groups who are less likely to have life assurance policies and this means that there are likely to be fewer claims than you might imagine.
Will my premiums increase?
Most of the life policies that I arrange for my clients are cost-effective term assurance policies and the premiums are guaranteed for the duration of the policy so in those cases the answer is no. It is one of the several advantages of these types of plan.
Whether premiums for new plans will increase is still open to debate. That is possible and will depend on claims experience across many markets. Of course, the older you are when you apply for insurance the more expensive it will be anyway so another reason to get this sorted now.
If you need life cover to protection your family, there is no reason to delay and the sooner you get cover in place the better.
Is it still possible to get life cover?
Very much so. I am still arranging life cover, and critical illness cover, for clients and applications are being accepted on normal terms. As you might expect, additional questions are being asked about travel and in some cases, applications may be deferred for anyone who has recently travelled from any country with a high number of COVID-19 cases.
Applications ask about travel in the past couple of years and there may be more questions on this topic. As claims can be denied for non-disclosure of any information, it is important that this is fully disclosed, as with the questions on personal medical history.
How do we arrange life cover if we can’t leave home?
While it is usually a requirement to meet to discuss your needs, to follow up with a recommendation and then meet again to complete paperwork, we can currently do all of this remotely. You won’t need to leave your home.
We can arrange to talk on the telephone to discuss what is best in your particular situation and then costs are provided. Once you decide to proceed, paperwork is emailed to you with an application form that can be returned in soft copy, over email. Once businesses reopen, this form with a ‘wet’ signature can be collected and it must be retained until then. There are some additional medical underwriting questions to reduce the requirement for any medical tests and examinations.
Don’t worry if you don’t like filling in forms – and who does? – as I will guide you through them.
I am an Independent Financial Adviser which means that I am not tied to any single insurance company. That means I can select and recommend plans from a range of companies based on cost, financial security, medical underwriting and more. Banks are linked to one company so options are very limited. The way in which insurance companies consider your medical history can vary, as does the flexibility of plans.
Life policies are arranged with offshore insurance companies so any claim is not subject to Sharia law. See here for why this matters.
We also need to discuss whether a life policy should be written in trust and this is important, especially where the main beneficiary, usually a spouse, is a different nationality in order to avoid potential tax liabilities and to reduce the delay in payments on claim.
Your requirement for life cover and other protection plans does not stand in isolation from the rest of your personal financial planning and there may be other issues that you want or need to discuss. I provide a full personal financial planning service and will provide you with other relevant information. All on a relaxed and non-pushy basis.
Further information on life cover and protection plans
I write articles such as this one as part of the holistic personal financial planning service and that I provide to expats, and the general consumer, financial and legal information that I provide in The National newspaper, on Capital Radio UAE, and on the Facebook group British Expats Dubai.
To arrange a discussion on any aspect of your personal financial planning, please email me at firstname.lastname@example.org Please take a look at the other useful articles on this website.