The coronavirus outbreak taught us a lot of important lessons. One of those is how you can be financially unstable all of a sudden. Many have first-hand witnessed how easily life can shift and are reminded of the value of financial security.
Based on Google Trends' information, search queries for "life insurance and coronavirus" have increased by over 250% since March 2020.
Max Funding’s head of finance Shane Perry says, "There's no such term as "too late" in getting life insurance, but the best benefits come to those that have a secured life insurance plan early on. Especially now that everyone's health is put at risk, those that have a life insurance plan are protected if they eventually die because of COVID-19."
If you have been inspired to avail life insurance policies because of Covid-19, here's a practical guide.
Life insurance provides financial support to dependents, e.g. spouses and children, when you pass away. It gives an assurance that your loved ones will be financially secure even when you're not around anymore.
Your dependents can use the funds earned as they want, such as completing a mortgage, settling unpaid loans, pay living expenses, and finance childcare.
The immediate cause of Covid-19 to the life insurance industry is how it has required life insurance providers to re-evaluate their subscription practices. They must have their policies finely balanced with the maintenance of rational and moral values.
To illustrate just how insurance companies had to re-examine their plans take the following scenario.
For example, a client has been tested positive for Covid-19; this client is considered 'high-risk'. When this particular client wishes to apply, a life insurance provider may decline or otherwise apply exclusions as many legal and ethical questions may arise.
Similarly, if the client is a frontline professional, they are highly susceptible to the virus and are also considered 'high risk' for life insurance providers.
However, these clients can still avail of life insurance plans given that the provider applies a Covid-19 exclusion. It will be necessary for the life insurance provider to decide how far the restriction could go and whether they can add specific exclusions. In most cases, subscription owing to COVID-19 are for a specified duration of time (such as six months) and must be independently verified with an interim evaluation.
The simple response is yes, but it depends on the nature and extent of your condition. Plus, note that several providers have been increasingly cautious about how they approve.
If the condition places you at heightened risk for Covid-19, such as hypertension and asthma, you will find it difficult to get approved for insurance policies.
Most life insurance plans require additional costs to cover critical illness. When you're diagnosed with a medical issue specified on your contract, you're covered with a tax-free payout. You can then use the funds to help with the bills or pay off loans.
However, take note that, so far, no life insurance policy lists Covid-19 as a critical condition. So when you're thinking about getting a refund when you're diagnosed with COVID-19, you would not be eligible.
If you are afraid that you may not be insured or adequately compensated, it is worth talking to a second-generation insurance broker.
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