Insurance Update – COVID-19

As COVID-19 (Coronavirus) spreads across the globe, we want to keep you informed of what the pandemic may mean for your existing insurance coverage, should you need to claim.

Every insurer is different with their claims and application process, however there are some common themes emerging during this difficult time. We have prepared some answers to common questions you may have regarding your cover; this seems to be the consensus between insurers, however if you would like some specific information regarding your cover, please feel free to contact us.

Does my current insurance policy offer cover in the event of death from COVID-19?

With existing insurance policies, there is no specific COVID-19 exclusion, of course all claims are assessed according to the terms and conditions of the specific policy. All claims will be processed on a case by case basis.

COVID-19 has been declared a pandemic illness by the World Health Organisation (WHO) and some insurance policies may have pandemic exclusion clauses. An example of this is HESTA Superannuation Fund who has recently made an announcement to reassure members that the pandemic exclusion clause in their insurance, will not be invoked.

Does my current insurance policy offer cover in the event of TPD, Trauma or Income Protection claim as a result of COVID-19?

If you become unwell and this impacts your ability to work beyond the duration of your waiting period, and subject to the terms and conditions of your existing policy you may be able to claim an Income Protection benefit. Please note, cover provided and waiting periods do not commence as a result of self-isolation or being unable to work but will commence once you are suffering from an illness.

In relation to Trauma and TPD claims, so far, the majority of those who suffer from COVID-19 are likely to recover relatively quickly and with no permanent consequences. Given this, neither Critical Illness nor TPD specifically cover COVID-19. However, in the event of serious and lasting secondary complications, you may be provided with coverage in accordance with the specific policy terms.

Does my Income Protection policy cover me if I am made redundant, lose my job or am given reduced working hours?

Unfortunately, income protection insurance does not cover every situation. It only covers inability to work due to illness or accident, and does not cover losing your job, being made redundant or having reduced working hours.

Is premium pausing available if I am no longer employed or am unable to make payments?

Many insurers offer a premium pause for a limited time if you suffer financial hardship and cannot pay your premiums. This does vary between insurers and can be very product specific. If you would like further investigations into the options available to you, please contact our office.

Note if your application for a premium pause is accepted, then your cover will also be paused and once reinstated, you may be subject to a waiting period before you can make a claim. It is therefore very important to consider immediate cash flow savings versus your insurance gap during the paused period.

Another Option may be to alter your payment frequency to make payments more manageable in the short term. There are also options for restructuring ownership for some premiums to be paid via your Superannuation account, if suitable.

Can I increase/apply for new or additional cover?

Application processes continue as normal. The exception to this being if you are suffering flu like symptoms or a confirmed case of COVID-19, cover will not be issued. Other exclusions may apply if you have travelled abroad recently or are showing symptoms or are in a high-risk category. In this situation each application will be assessed on a case by case basis, and some insurers are applying pandemic illness exclusions on new policies. For example, QSuper is applying a pandemic exclusion for all policies written after 18 March 2020.

Where can I find more information?

Our team of advisers is dedicated to helping ensure you have the level and breadth of cover to safeguard your family’s financial security during this turbulent time. Please contact your adviser or email if you would like more specific advice or a review of your current cover.

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