Does your life insurance policy cover Coronavirus?

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Published: April 8, 2020 3:34:01 PM

When a pandemic like COVID-19 becomes world news, you may start to wonder how news of an outbreak might shape the life insurance policy you already have.

insurance, life insurance, life insurance for Covid-19, coronavirus, WHOA global health crisis like the widespread COVID-19 outbreak that began in late 2019 may make applying for a life insurance cover more complicated.

The uncertainty and unpredictability of events in life give utter significance to buying life insurance. Life insurance not only protects your family members from the unexpected vagaries of life and financial disasters due to instances such as accidents and critical illnesses but also gives them financial stability from the eventuality of death of the earning family member. The most efficient way to protect your family from financial instability is through a term insurance policy.

A term insurance policy pays the entire sum assured to the nominees in case of death of the policyholder to help them tide over any financial crunch. Most importantly, a term plan is the only kind of insurance policy that you need to have because it gives you maximum cover for lowest cost. Moreover, now you can buy term insurance even till the age of 99+ years which was not possible to do till few years back.

Your life insurance policy offers financial protection for your loved ones in the event that you die unexpectedly and when a pandemic like COVID-19 becomes world news, you may start to wonder how news of an outbreak might shape the life insurance policy you already have. Recently, the World Health Organization (WHO) has declared the coronavirus outbreak a Pandemic. According to the World Health Organization, a pandemic is the global spread of a newly introduced disease, while an epidemic is when a disease is constrained to one region.

A global health crisis like the widespread COVID-19 outbreak that began in late 2019 may make applying for a life insurance cover more complicated. However, as long as you have an active policy in place, if you were to die of a pandemic illness, your family would certainly receive the death benefit. As per most life insurers, life insurance policies cover pandemics like Coronavirus.

Because your health and medical history are determining factors in what type of policy premiums you pay for life insurance, it’s reasonable to assume that a global health crisis like the coronavirus would have some impact on your policy only in case you are planning to buy a policy now. However, if you hold an active policy, you’re covered. In the rare event you were to die from a pandemic illness, your beneficiaries would still receive the policy’s death benefit.

If you already have a life insurance policy and you pay your premiums on time, there’s no reason to sound the alarm. However, if you have plans to travel to a highly compromised area or a pandemic has hit home, it is advised to change your plans and avoid unnecessary travel as life insurance companies may change the health classification as travelling against the government advisory can lead to rejection of claim. If you die due to travelling to a country with a CDC COVID-19 travel alert, life insurance companies can deny your family the death benefit. While some life insurance policies have exclusions for specific causes of death such as death while doing a high-risk activity or in an act of war, there is no pandemic exclusion for life insurance policy.

For people who are wondering if they should buy a life insurance during a pandemic like COVID-19, the short and easy answer to it is yes. In fact, one must not wait for a global health crisis to instate to take necessary financial protection for you and your family. A pandemic doesn’t mean end times. Life insurance is a risk management tool, so anytime you have outstanding debts or people who depend on you for income, you should have a life insurance policy in place to protect your loved ones from financial suffering if you die unexpectedly and prematurely.

(The author is CBO-Life Insurance, Policybazaar.com) 

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