Coronavirus: What you need to know about life insurance

You can still take out life insurance during the coronavirus pandemic, as long as you've followed government travel advice.

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The coronavirus (COVID-19) 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.

Does your life insurance cover COVID-19?

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 March, 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 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."

How does government travel advice impact life insurance?

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 government travel advice. But what does that mean?

Well, on March 18, 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.

What if you got your life insurance after COVID-19 became a known event?

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.

Can you still get life insurance to cover COVID-19?

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."

Can I still get life insurance if I'm a healthcare worker?

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 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."

Will coronavirus impact life insurance in the future?

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.

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.

Compare life insurance policies

Name Product Maximum Cover Maximum Entry Age Fully Underwritten? Terminal Illness Benefit Optional Extras
NobleOak Life Insurance
TPD cover, Trauma cover
Get your two months free when you buy NobleOak Life Insurance policy. Offer ends 30 June 2021. T&C's apply.
ahm Life Insurance
TPD cover, Trauma cover
ahm Health members can save 10% off premiums.
Real Family Life Cover
TPD cover, Trauma cover
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
Insuranceline Life Cover
Trauma cover
Get a $100 bonus gift after 2 months. Offer ends 30 September 2021. Plus get 12 months cover for the price of 11 if you pay for life insurance annually. T&Cs apply.
Zurich Ezicover Life Insurance
No optional
Get the first month free and a 10% discount if you take out a second life insurance policy (discount applies to second policy). T&C’s apply.
Medibank Life Insurance
TPD cover, Trauma cover
You could win a $2K EFTPOS gift card when you get a Life Insurance quote by 20 July, 2021. There is a new winner every fortnight. Plus, Medibank health members save 10% on premiums every year. T&Cs apply.

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Other quick ways to save money

Are you worried about your finances during this time? Don't forget to review your bills - spending a little time on admin, could save you over the weeks and months to come.

Here are some guides on how to save some money on your daily expenses. There are plenty of things you could do, from checking your energy rates, switching to a low-interest credit card, or simply dropping parts of your insurance that you don't need.

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