Section 72

Will my life assurance pay out for Covid 19?

I have received a few queries from existing clients asking whether their life insurance and other policies would pay out if they were to die from or contract Covid 19, so I thought I would set out some clarification on where the life assurance companies stand with regard to paying claims giving the current climate.  For the most part, all life assurance companies have said that their claims philosophy remains the same as prior to this pandemic.  This should provide you with some peace of mind.

The 3 primary forms of protection cover are income protection, life assurance (mortgage protection, pension term assurance, term assurance, Section 72 insurance) and specified serious illness cover.  Each type of cover is outlined below.

  1. Income protection – If you are diagnosed with Covid 19, you would be unlikely to remain out of work as a result of a ‘routine dose’ for long enough to exceed the deferred period on your income protection policy.  However, if there were complications as a result of contracting the disease and you were unable to work for longer than the deferred period of your policy, then, yes, your income protection policy would pay out a benefit.  Your policy also provides you with a hospital cash benefit where you can receive a daily benefit from day 8 in hospital onwards, up to a maximum of 3 months.  This is where choosing the right provider becomes interesting… What we consider to be a hospital has changed recently – For instance, do the new isolation units at Citywest qualify as hospitals under a standard definition of a hospital?  No, probably not.  New Ireland Life Assurance Company said they would not pay out an income protection hospital cash benefit if someone were admitted to one, but Aviva Life & Pensions (including the Friends First policies) said that claims would be considered on a case by case basis, with the aim of considering favourably. 
  2. Life assurance – Yes – all forms of life assurance policies will pay out, in full, subject to the usual terms and conditions of the policy, if you die as a result of Covid 19.
  3. Specified Serious Illness Cover – Covid 19 is not an illness specified in any Specified Serious Illness contract in Ireland, so your policy will not pay out for a diagnosis of Covid 19.  However – As with the income protection policy, if any complications lead to an illness as defined on the list, then yes, they will pay out.  E.g. On a ventilator for 10+ days.

In summary, the cover you have remains as was when you first took it out.  Claims will be paid as intended and there are no negative changes as a result of the Covid 19 pandemic.  However, some restrictions may be put in place if you were diagnosed with Covid 19 and decided to take out additional cover.  A diagnosis and recovery may delay new cover being offered for 1 to 6 months.  Although, given the high number of unknowns that remain with regard to the illness, this could be subject to change.

Most of the life assurance companies have also introduced additional options for those who now find themselves being in a position where they are financially unable to pay their premiums.  If you find yourself in this position, please contact me directly to discuss, as there are some positive options open to you.

If you have any questions about your own cover, please do not hesitate to contact me at any stage either by email or on 01 668 6136.  Likewise, if you know of anyone who you feel may benefit from some form of life assurance cover or income protection cover, please ask them to contact me.

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