Is Covid-19 Covered In My Life Insurance Policy?
It is quite reasonable for one to assume that a global crisis such as the coronavirus (COVID-19) would have some sort of impact on their life insurance policy in terms of premiums and acceptance if the stage of the policy is the application stage or their life insurance benefits for the existing policy.
It is the uncertainty and unpredictability that life brings with itself that makes us realize the importance of holding a life insurance policy. It makes sure to protect your loved ones against any unexpected misfortune that life may put you in and the financial burdens that may occur from it due to any accidents or critical illnesses, along with this it also provides financial stability to the loved ones in case of demise of the breadwinner of the family. A pandemic would be one of the scary situations that life can put us under, and in situations as such, we come to realize how important protection for life is.
The WHO – World Health Organization officially declared coronavirus or COVID-19 as a pandemic. The virus has managed to spread to all the corners of the globe, infecting an endless count of people in numerous countries. With the many out there being affected and even facing death because of this health crisis there is one question that might be arising in many of ours’ heads – will my life insurance policy cover the demise of the policyholder that is caused due to this virus i.e., the coronavirus? Another question to consider is – will one be able to purchase a life insurance policy after contracting this virus?
Hang on to find the answers to these questions mentioned above.
Existing Beneficiaries of the Life Insurance Policy
If the policyholder passes away due to COVID-19 or coronavirus, the nominees or the beneficiaries of the policy contract will receive life insurance benefits in the form of a payout as a death benefit.
If the deceased individual was holding a valid life insurance policy, the beneficiaries or nominees must be aware that any demise caused because of any health-related problems are usually covered under a life coverage policy, even with a term insurance policy. Therefore, this implies that once the policyholder passes away the dependents or nominees will be paid out a death benefit after they file a valid life insurance claim.
One of the life insurance benefits, the death benefit is an agreed amount of money known as the sum assured payable by the insurance company upon the demise of the insured individual to any beneficiary or nominee named in the policy contract. This name(s) of dependent(s) are listed out while the buying of the life insurance policy. The nominees can easily check the amount of the sum assured in the contract of the policy.
Generally, the existing policyholders are covered but some insurance providers might be having some exclusion for a specific cause of death. However, an unfortunate scenario of the policyholder’s demise because of a pandemic illness such as the coronavirus should be covered if he or she is already holding a life policy.
If I Get a Life Insurance Policy Now, Will COVID-19 Be Covered?
If you are planning to opt for a life cover policy at this point in time, you should keep in mind that the insurance providers calculate the premium charged to you on the policy based on your medical and health history. Therefore, it is pretty reasonable to assume that such a global crisis as the coronavirus would have quite an impact on your life policy application’s acceptance along with the premiums charged on the policy – that is, if you are currently in your application stage of the entire process.
If you have already contracted this infection, the insurer may decide to hold or in some cases even reject your policy application. As long as the policy seeker makes everything crystal clear and discloses all the details correctly at the point of purchase wherein the individual was not affected by a coronavirus infection, the life insurance benefits in the form of death benefits will be paid out to the nominees even if the cause of the demise is coronavirus afterward.
However, it is vital for every individual to examine and study the terms and the exclusions of their life insurance policy properly and carefully in order to know the various different scenarios wherein they will not be provided with a cover.
What If The Insurance Providers Consider Coronavirus Under Critical Illnesses?
Generally, the life insurance providers out there do not explicitly deny any payment of the sum assured as the death benefit for any deaths that are caused by illnesses. But, you do need to consider the conditions of your life insurance policy’s add-ons. The benefit of such add-ons is only paid if you adhere to the conditions that have been stated. For example, some life insurance policies along with the critical illness rider may not entertain any claims wherein the policyholder did not abide by the medical advice.
If we assume COVID-19 or coronavirus as a part that is covered under the critical illness rider of a policy, then the benefits associated with this will be paid out or not paid out depending on the terms and conditions of such a policy. For example, if you are holding a term life insurance policy, some insurance providers in the market state that the critical illness benefit will not be paid out in a scenario with the critical conditions wherein the policyholder passes away within a period of 30 days from the date of diagnosis. However, such conditions will not have any impact on the payout of the sum assured on the base policy.
The Bottom Line
A life insurance policy is definitely one of the greatest risk management tools. So any time you have people depending on you or any debts outstanding, you should opt for such protection for your family.
One must not wait for such a global crisis to occur to realize the importance of financially securing their family.