Life insurance and coronavirus: Am I covered?

You take out life insurance to provide your loved ones with financial support should you unexpectedly die. So you will be reassured to know that life insurance policies do cover the novel coronavirus, known as COVID-19. 

If you die of the virus and have been truthful in your life insurance application and kept up with payments, your named beneficiaries will receive compensation.

According to the Association of British Insurers (ABI), insurers paid out more than £202 million to support the families of those who died of COVID-19 during the first year of the pandemic.

When you apply for life insurance, the insurer will ask you about your current health and medical history. One of the questions will be whether you’re currently experiencing symptoms of coronavirus, or have recently tested positive for it. If either is the case, you won’t be able to take out a new life insurance policy right now. But when you recover, you can reapply.

Typically, insurers will defer your application if you currently have symptoms of the virus (usually a new or unexplained continuous cough, fever, or loss of smell and taste) or have tested positive for it within the last 30 days. They may also postpone your application if you’ve been in direct contact with someone diagnosed with or suspected of having the virus, and are self-isolating. You'll then be able to reapply once you've recovered and the postponement period (usually two weeks to three months, depending on the insurer) has elapsed.

Testing positive for coronavirus does not impact any life insurance policies you already have in place.

As part of their underwriting, some insurers are now asking applicants if they've had COVID in the past, and particularly if they were previously hospitalised with it. Having been severely ill with COVID may impact your eligibility for life insurance with some insurers, or increase the premiums they quote you.

Yes, if you’re a key worker you will be able to find life insurance cover during the ongoing pandemic. However, some insurers, including Royal London and AIG, are known for being more open to covering key workers than others. 

Finding life insurance cover has been a particular concern for frontline healthcare who are regularly around patients with the virus. Their worries prompted the British Medical Association (BMA) and the ABI to issue a joint statement affirming that healthcare workers should not face additional barriers when applying for insurance cover.

This means that, unlike other applicants, healthcare workers won’t automatically have their applications for life insurance deferred if they acknowledge being around patients with coronavirus, with insurers taking into account that the contact was while they were working and wearing PPE.

There are reports that insurers have become less willing to offer life insurance to older people or the millions classified by the government as vulnerable and asked to shield. 

As the pandemic has ebbed, finding life insurance for older and high-risk people has become easier - provided they’re fully vaccinated. Several insurers, including Legal & General and Scottish Widows, have said that as long as they’re fully vaccinated, people more vulnerable to COVID have the same chance of qualifying for cover as they did before the pandemic.

Long COVID refers to a range of symptoms experienced by people in the weeks and months after having COVID-19, ranging from breathlessness to loss of taste and smell. Studies show that survivors of COVID-19 have a higher risk of death for up to a year after their infection.

If you die from the lingering effects of coronavirus, your life insurance will pay out, just as it would if you died of another illness.

But for most people, long COVID isn’t fatal. It’s more relevant to ask if the critical illness policies, that are often sold alongside life insurance, cover long COVID. 

Critical illness cover pays out a lump sum if you’re diagnosed with a serious illness during the policy term. But only certain illnesses qualify, as specified in the policy terms.

COVID or long COVID usually aren’t among these. But if over the course of your COVID infection, or as part of long COVID, you develop a condition that is listed - such as kidney or liver failure - you may be able to claim on your critical illness policy.

In 2021, as vaccines against COVID-19 were being rolled out across the world, rumours spread that receiving one of the jabs would void your life insurance policy. The Association of British Insurers (ABI) has reassured the public that receiving the vaccine doesn’t impact your life insurance, or any other forms of insurance.

Now that all adults in the UK have had the opportunity to be vaccinated against the virus, insurers are asking about applicants’ vaccination status are part of the underwriting process. You’re required to respond truthfully, as you are to other questions about your health and medical history.

If you’re young and healthy, you’re unlikely to be denied coverage if you’re not fully vaccinated. But insurers may refuse to offer life insurance to older or vulnerable applicants unless they’ve had the vaccine. These applicants may have been rejected by insurers during the first year of the pandemic, but being fully vaccinated can make them eligible for life insurance cover again.

The ABI has said: “Vaccinations should not affect existing policies, but for new applications a couple of insurers have introduced questions that would help those who might have previously struggled to get cover.”

If you’re applying for a life insurance policy with a very large potential pay-out, you may similarly only be accepted if you’re fully vaccinated.