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Life insurance and coronavirus: Everything you need to know

Does life insurance cover pandemics like the coronavirus?

Updated

Fact checked

The short answer is: If you already have a policy in place, you’re covered for COVID-19. If you haven’t yet applied for a policy, you could face delays in approval.

Is the coronavirus covered by life insurance?

Yes. There is no pandemic or epidemic exclusion for life insurance. This means if you have an active life insurance policy and continue paying premiums, your beneficiaries will receive a payout if you die from COVID-19 or related complications. And if you have a permanent policy, you could use the cash value to pay the bills for your family or business if you need financial help right now.

Are there any exceptions?

Yes — though they’re not all unique to coronavirus-related deaths. Your insurer might not pay out your policy in these cases:

  • You lied on your application. Life insurance applications are legally binding documents. If your insurer discovers you were dishonest in your application, they have the right to delay the payout to your beneficiaries while they investigate, or deny it altogether.
  • Your policy lapsed. If your policy lapsed and you died before getting it reinstated, your beneficiaries won’t receive any money. That being said, many insurers are extending grace periods and pausing policy cancellations for non-payment, so there’s some leeway at the moment. Contact your insurer to discuss your payment options if you’re facing financial hardship.
  • You purchased a policy that only covers accidental death and disability. These policies only pay out if your death or disability was caused by an accident, and your beneficiaries will not be entitled to a death benefit if your demise was a result of an illness, disease or underlying medical condition.

What if I have an active life insurance policy and travel to an affected area?

Your life insurance company can’t change your rating class or premium after your policy is in force. As long as you make timely premium payments, you’re protected.

To stay safe, heed government and agency updates about travelling to areas affected by COVID-19 to avoid facing higher risks of quarantine or contracting the virus.

No hospitalisation coverage for those who disregard travel advisories

On 24 March 2020, the government has announced that any Singaporeans, permanent residents and long term pass holders who depart Singapore from 27 March 2020 onwards will be charged unsubsidised rates for inpatient stay at public hospitals, if they’re admitted as suspected COVID-19 patients within 14 days of returning to Singapore. These people will also not be able to claim from their MediShield Life or Integrated Shield Plans for these treatments at both public and private hospitals.

If I get the coronavirus, can I use my living benefits riders?

It depends on the severity of your diagnosis, and whether you purchased riders with your policy.

If you contract coronavirus and can’t work, you might be able to use your waiver of premium rider to pause your premiums for a certain amount of time, or your disability income rider to pay out monthly benefits.

An accelerated death benefit rider only comes into play if you’re diagnosed as terminal. If that happens to you as a result of COVID-19, you may be able to access up to 75% of your death benefit — just know that this amount will be deducted from your beneficiaries’ payout.

Can I apply for life insurance during the coronavirus pandemic?

Yes. While the coronavirus is an evolving pandemic, it shouldn’t affect your ability to apply for life insurance.

However, your insurance company might postpone your application if you have plans to travel overseas or have recently returned to Singapore. From 18 March 2020, Singaporeans are advised to defer all travel abroad until further notice. Those who returned to Singapore are to serve 14 days isolation at SHN facilities.

The time you’ll have to wait for coverage varies, so ask your insurer about the timeframe. Your insurer will likely require you to be back in Singapore for weeks or months before they approve your policy to ensure you haven’t caught the coronavirus.

Similarly, if you contract COVID-19 and then apply for life insurance, your insurer will likely require you to fully recover before issuing a policy.

Do I need to go for a medical exam?

Yes. A medical exam is often part of the life insurance purchase process as you’d need to prove that you’re not a risky customer.

No-medical underwriting policies exist, but typically these policies typically come with lower insured sum to reflect the risk that the company is taking on. On the bright side, if you undergo a medical exam, you would know whether you’re healthy or otherwise.

If you’re not comfortable taking a medical exam at this time, talk to your insurer. They may be willing to delay the exam and issue a temporary policy in the meantime.

Will life insurance premiums increase due to the coronavirus?

If you have an active life insurance policy, your life insurance premiums won’t change.

For future policies, life insurance companies set premiums based on a range of factors, including life expectancy. A pandemic increases your chances of mortality, so you can expect to pay a higher premium if you take out a policy during the coronavirus.

On the same note, if you contract and recover from COVID-19 and then apply for a policy, your insurer might still assign you a higher risk rating — and a higher premium.

Will my insurer cancel my policy if I can’t pay my premiums?

Probably not. The Monetary Authority of Singapore (MAS) has announced that policyholders of life and health insurance will be allowed to defer premium payments for up to six months, while maintaining insurance coverage. However, approval is based on a case-by-case basis, so make sure to apply directly with your insurer. Some insurers have also automatically extended grace periods and due dates.

If you know you can’t make your premium payment, contact your insurer as soon as possible to discuss your options.

Compare life insurance companies

Should I get life insurance during a pandemic?

During a global health crisis like the coronavirus, it’s natural to worry about protecting your family and whether a new insurance policy will cover coronavirus.

If you have loved ones that would be financially burdened if you died, it’s a good idea to look into life insurance. That way, they’ll have the money they need to pay for living expenses and maintain their lifestyle when you’re no longer there to provide for them. And if you have assets to protect or cosigned debt like education loans, it might be worth buying a policy so those obligations aren’t passed on to your family if you die prematurely.

On the other hand, if you have the savings to self-insure or don’t have dependents, assets or outstanding debt, life insurance may not be as important to your financial planning.

What’s not covered by life insurance?

During a pandemic like the coronavirus, your policy’s typical clauses apply. Your insurer won’t pay out your policy if you commit suicide within the first two years of taking out a policy or die while committing a serious crime. They also won’t pay out your benefit if you die in a way that’s listed as an exclusion in your life insurance policy — like racecar driving or recreational flying.

What happens if I lie about my travel plans?

Your beneficiaries might not receive any money when you die. All life insurance policies have a contestability period, which means your insurer can investigate your death if you die within the first two years of taking out a policy.

If your insurer finds out that you lied or withheld information about travel to affected areas, the company has the right to delay or deny the death benefit while investigating your claim — even if you didn’t die from the coronavirus.

Life insurance is a legal contract, and you must be completely transparent in your application or risk denied claims.

What is a pandemic?

A pandemic is the rapid spreading of a disease worldwide, according to the World Health Organization (WHO). It’s different from an epidemic, which refers to the spread of disease in a contained population or region.

WHO declared COVID-19 a pandemic on March 11, 2020.

The life insurance claims process is the same for all life insurance policies. If you’re a beneficiary, contact the life insurance company that holds the policy, and have the policy number handy.

The insurer will likely ask you to complete a claims form and submit documentation. This might include a certified copy of the death certification and any supporting documentation, such as a police report.

What can I use the life insurance payout for?

Beneficiaries can use the money however they wish. Many choose to use the proceeds of a life insurance policy to cover the funeral and burial costs, medical bills, mortgage or rent payments, childcare and college tuition.

Bottom line

If you already have a life insurance policy, the coronavirus outbreak should have no impact on your coverage and your beneficiaries’ death benefit. But if you’re hoping to apply for a policy, you might have to wait for approval, especially if you’ve travelled overseas during this period.

To protect your family during the pandemic, compare life insurance companies and steer clear of the regions that have been hit the hardest by coronavirus.

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