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The following provides information for clients who have questions in respect of how the Coronavirus (COVID-19) pandemic may impact insurance cover. The information is current as at 26 March 2020 and we expect changes to be made as the situation and government response changes.
1. Are there any exclusions on my policy for COVID-19?
The following retail insurers have all issued statements either on their website or to the adviser community confirming there are no COVID-19 exclusions. Several insurers have confirmed statements will be released in the coming days (links are included to the insurer website where available and further information can be found on the COVID-19 page on the adviser site).
So long as your cover was in place prior to the declaration of a pandemic (generally 20th February 2020) you are covered in the event that COVID-19 leads to a claim.
- Asteron (TAL)*
- ClearView LifeSolutions
- Comminsure (AIA)
* The TAL/Asteron statement refers to specific product series rather than all retail policies.
Cover under group life policies may include pandemic exclusions and will be dependent on your policy statement.
2. Can I make a life insurance claim for a death related to COVID-19?
COVID-19 in itself is not an insurable event, please see information above.
3. My income has stopped or been cut substantially because of COVID-19. Is there anything my insurer has on offer to minimise the impact of premiums on my family and I in the coming months?
At this stage, most insurers are working with reinsurers to deliver clients alternatives to cancelling their cover. Some of the options available from some insurers for people experiencing hardship because of job loss include the following:
- Suspending Cover / Premium Pause some insurers can pause premiums for up to 12 months on request from the insured. During this time coverage stops. At the conclusion of the pause (which can be ended earlier), cover restarts without any need for a health / employment declaration.
- Waiver of Premiums While Involuntarily Unemployed – Some insurers can waive premiums for up to 3 months if the insured person becomes involuntarily unemployed with coverage retained during this time.
- Transfer of Ownership – Some insurers give clients the option to transfer ownership from non-super to super. Some will allow this process online while others will require that clients call their adviser to arrange the change.
Please speak to us if you are in this situation and need our advice.
4. Can I make a COVID-19 related claim for TPD, Income Protection or Trauma?
COVID-19 is not excluded however you still need to meet the terms and conditions of your policy. As an example; if you hold income protection with a 4 week or 30-day waiting period, are diagnosed with the virus leaving and become unable to work for 3 weeks; no claim would be payable. If your sickness were to extend for another 3 weeks (6-week total illness) then you would be able to claim for 2 weeks benefit. For policies with longer wait periods current evidence suggests that recovery is likely well before then.
5. What happens when applying for more cover?
All the major retail insurers have applied additional COVID-19 underwriting questions to new applications which take into account recent travel as well as potential exposure to others that may have been exposed. If unwell, the insurer will decline cover until you are given a clean bill of health from your doctor. We believe blanket COVID-19 exclusions may be brought in for cover increases and where new cover is taken out as well as where cover that has lapsed (is reinstated) while the current pandemic remains.
6. I am suffering financial hardship, is premium relief available?
Please contact our office if you are considering cancelling or reducing your cover or otherwise suffering financial hardship. Often there are options available that provide premium relief. These will vary between insurers and be on a case-by-case basis
7. Can I make a claim for Income Protection relating to COVID-19 for having to be away from work either because of self-isolation or because I have received medical advice not to attend work, even though I haven’t been diagnosed with this illness?
No, self-isolation or medical advice to stay away from work as a precaution to your health does not qualify you for an income protection claim.
8. Does Income Protection insure against redundancy/loss of job?
Although policies vary somewhat the answer is generally going to be no, or at least they don’t cover it in any useful way. Income Protection is designed to cover you in the event of illness or accident.
9. I think I’ve received a suspicious email relating to COVID-19. What should I do?
It is important to be aware of numerous online security scams that are targeting people at this vulnerable time. High-profile events like the coronavirus are almost inevitably exploited by cyber criminals to spread malicious files, conduct scams via email and phone and often play on justified concerns.
If you have any questions you can contact Scamwatch, which has a dedicated page on the coronavirus – https://www.scamwatch.gov.au/news/covid-19-coronavirus-scams or Stay Smart Online for more information on ways you can protect yourself.
10. Will newly insured clients be treated any differently under your policies?
This answer is changing daily and differs between insurers. Some insurers may mandate COVID-19 exclusions whilst others will not. If and when applying for cover; we will be able to confirm the specifics of your application prior to the cover being implemented.
11. I have COVID-19. Can I get cover or increase my existing cover?
No, your application will be deferred until given a clean bill of health form your doctor.
12. I haven’t been diagnosed with COVID-19 but have been in contact with someone diagnosed with it. Can I get cover?
Your application will be deferred for the required timeframe to provide medical clearance confirming you do not have COVID-19.
The information within, including tax, does not consider your personal circumstances and is general advice only. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.
The views expressed in this publication are solely those of the author; they are not reflective or indicative of licensee’s position and are not to be attributed to the licensee. They cannot be reproduced in any form without the express written consent of the author.
Elliot Watson Financial Planning Pty Ltd and its advisers are Authorised Representatives of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.