Coronavirus insurance: What life insurance may (and may not) cover you for

Posted: 20 April 2021 4:46 pm
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Does life insurance cover you for coronavirus? Here's what leading insurers say about coronavirus-linked exclusions for life cover.

It can be tricky to work out the latest details of coronavirus insurance. After all, underwriting criteria is subject to change at any time.

While finding common ground from policy to policy isn't easy, we pored over 22 life insurance policies in Australia and found clear answers on their coverage for coronavirus.

Will my life insurance pay out if I die from coronavirus?

The short answer is "yes". Life insurance policies have covered infectious diseases (of which COVID-19 is one) for many years. Most leading life insurers in Australia are explicit on the topic of how customers can make a claim for the pandemic.

On its website, NRMA writes: "There are no general exclusions for the coronavirus in any of our individual Life Insurance policies."

This is echoed by Asteron Life Insurance: "There is no general COVID-19 exclusion on our individual life policies."

ahm offers the following reassurance on its site: "Rest assured, none of our ahm life insurance products exclude cover for pandemics, such as COVID-19." It added: "As usual, all claims will be assessed in line with your policy's terms and conditions."

So, 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."

Can I 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. Also, life insurers Zurich and OnePath both now offer a one-off benefit of up to $50,000 in COVID vaccination protection (until 31 December 2021).

Just keep in mind, you'll probably have to let an insurer know if you've been overseas recently, or if you've been in close contact with anyone diagnosed with COVID-19.

More than two-thirds of Australian life insurance brands mention coronavirus.

In total, Finder's research team looked at 22 life insurance brands and found that 15 had specific wording linked to coronavirus on their websites or in their product disclosure statements (PDS).

We couldn't find any specific pandemic exclusions. That said, you may still want to pick up the phone and give an insurer a call before you sign up for a new policy. This can help you get extra peace of mind about exactly what you'll be covered for.

Last year, The Financial Services Council (FSC) 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.

Front-line healthcare workers and others who support people with COVID-19 also (in theory) won't be excluded from coverage. That's because of an "interim authorisation" granted by the Australian Competition & Consumer Commission (ACCC) letting insurers coordinate with one another, meaning frontline healthcare workers shouldn't be excluded from coverage.

What if I were to get sick or die after my COVID-19 vaccination?

Google Trends data in Australia suggests that there were three recent spikes in searches for the term "vaccine life insurance". This started on the week commencing 28 February 2021.

Covid vaccine

Anecdotally, some of this activity could be linked to a fake news story last month from America, which circulated quickly on social media. The hysteria led to a rebuke from the American Council of Life Insurers (ACLI), which made a statement on misinformation linked to coronavirus vaccines.

Paul Graham, senior vice president for policy development at the ACLI, said: "Life insurance policy contracts are very clear on how policies work, and what cause, if any, might lead to the denial of a benefit. A vaccine for COVID-19 is not one of them."

Closer to home, AAP FactCheck has also debunked a post on social media that wrongly claimed COVID-19 vaccines will void life insurance policies.

Three leading life insurance brands in Australia confirmed to Finder that they didn't have specific exclusions linked to coronavirus vaccines. Suncorp said this was "not a concern for us" and, from a claims point of view, it would be treated "just like a flu vaccine".

It's understandable that some people are concerned about events linked to coronavirus, especially those with a pre-existing health condition who are considered to be in a higher-risk group.

But with regards to vaccinations, it's worth keeping in mind how extremely rare issues linked to vaccinations have occurred. More than 869 million shots have been administered worldwide to date, with recent data suggesting that you're three times more likely to get struck by lightning than dying from a COVID-19 vaccine.

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. 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.

If I'm self-isolating, can I still get life insurance?

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.

Will I get income protection benefits if I stop working to care for a COVID-sick family member?

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.

Has anything changed in the way I can buy life cover?

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.

Are there any circumstances where life insurance won't cover me?

Despite the industry's reassurances, it's worth keeping in mind that there are a number of common exclusions for life insurance. A few examples include:

  • Travelling to a country that has a "Do not travel" warning from the government. By heading overseas against government advice, you're likely to invalidate your life insurance policy.
  • Making a claim within an exclusion period. For example, while insurers will often pay a death benefit due to suicide, an exclusion period of around 13 months usually applies before you can make a claim.
  • Taking part in illegal activity. If you are seriously injured while taking part in illegal activity, then your insurer may deny your claim.

Thinking about getting life insurance to protect you and your family in the future? We make it easy to find life insurance quotes and compare your options.

Picture: Getty Images

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