Mackay Insurance Blog
Questions and Answers About Life Insurance and COVID-19
It is the topic we all put off talking about until a pandemic suddenly unfolds. All at once, you may find yourself asking the question: is it too late to enrol in life insurance now? The answer, thankfully, is no; however, continuing to delay your enrolment to see how things play out may put you and your family at risk of coverage exclusions related to the new novel coronavirus.
Right now, health insurance providers are scrambling to calculate risk and overhaul policy terms accordingly. These new terms are likely to impact future policyholders of all ages, since COVID-19 and its secondary complications do not discriminate based on age.
How Will Coverage Be Handled For My Existing Life Insurance Policy?
If you have an existing, active life insurance policy right now, you are unlikely to experience any difficulties with coverage for COVID-19 related claims, provided you meet all other policy requirements. If you have questions about this, please contact us at Mackay Insurance and we can assist you in understanding your life insurance policy.
My Life Insurance Coverage Is Deferred - What If I Need to Make a Claim?
If your life insurance policy is deferred, your coverage will not activate until that period has concluded. It is, however, unlikely that COVID-19 related claims will be handled differently than other "death by natural causes" claims that relate to disease or illness.
I Want to Enrol in Life Insurance, But Will Coronavirus Claims Still Be Covered?
At this point in time, there is no vaccine for the new novel coronavirus. The pandemic is creating an unusually high demand for life insurance products - and for good reason.
As of time of publication, Canadian insurance companies (including Mackay Insurance in Belleville, Ontario) that offer life insurance products have not yet changed terms to exclude COVID-19 related claims.
There is no guarantee, however, that they will not choose to do so in the future, especially if available data indicates the outbreak is worsening.
What you need to know right now is that if you choose to enrol in a life insurance policy today, you will likely receive the same coverage terms that current policyholders have - all other aspects remaining equal.
I Have Tested Positive for COVID-19 - Can I Still Enrol in Life Insurance?
This is a slightly more complicated question, since different insurance providers may choose to handle this sensitive issue differently.
Speaking in the most general terms based on what is known right now, the most likely outcome is that you will be able to enrol in life insurance, even if you have tested positive for COVID-19 and are showing symptoms.
It is equally likely that the policy issuer will place your policy into a deferral period, pending the outcome of your diagnosis. If this is the case, it is not different from how insurance providers have handled policy issuance in the past when a serious illness or disease has been involved.
I Returned From China Recently - Can I Still Enrol in Life Insurance Now?
To date, it has become standard practice in the insurance industry to ask applicants to share details about recent or upcoming travels. Generally, these inquiries are limited to the past quarter or near future.
If you have recently returned from any region reporting a high incidence of COVID-19 cases, or if your near-future travel plans are taking you into such a region, the insurance provider may elect to place your policy into a deferral period.
I Have a Disability Insurance Policy - Can I Make a COVID-19 Claim Under That Policy?
This is a good question. Here, the claim would relate to loss of income due to COVID-19 diagnosis.
The type of policy you have (short-term, long-term) and the waiting period (typically anywhere from one week to two years) will dictate what coverage you receive.
The best-case scenario is this: if you have lost income due to COVID-19, and your waiting period has expired, and your disability insurance policy is still in force, it is likely your claim will be honoured.
It may also be worth asking your insurance company to waive the waiting period.
I Have a Critical Illness Insurance Policy - Can I Make a COVID-19 Claim?
If you have a current active critical illness insurance policy, your policy likely outlines the specific health conditions that qualify you to make a claim against your policy.
Since COVID-19 is a newly identified illness, it will not be listed. This means insurers will likely elect to exclude COVID-19 related policy claims.
You may have some wiggle room here if you contract a serious secondary complication due to being diagnosed with COVID-19.
In this case, as long as the secondary complication itself is on the approved list of covered critical illnesses, it probably will not matter that COVID-19 came first - your claim will most likely be approved.
Is Now the Right Time to Purchase Life Insurance in Ontario, Canada?
Here in the province of Ontario, the coronavirus pandemic is still a rapidly evolving situation. It is very hard to make any predictions about the progress of the virus even for the near future.
This means that the basic reasons to apply for life insurance remain the same, but may perhaps be more urgent now.
If you are newly married, caring for dependents (whether young or elderly), have children or are concerned about loved ones bearing the cost burden of your burial and funeral, this is an excellent time to consider enrolling in life insurance.
Perhaps the greatest value of a new life insurance policy is simply knowing your loved ones are protected.
Get in Touch
Do you have more questions about applying for life insurance and how that process might be affected during COVID-19? Our team at Mackay Insurance continues to work remotely, but we are here for you. You can read more here about how to reach out to your broker via phone.