An unprecedented global pandemic throws up a lot of questions. Suddenly we’re having to think about things we haven’t thought about before – including the unthinkable.
Terrifying daily death tolls across the globe may be causing many of us to think about our own mortality – particularly those of us who are responsible for little ones.
The mature and sensible thing to do when you’re an adult with children, a mortgage, elderly parents, or really any responsibilities, is to make sure you have a robust life insurance policy.
Because, although it isn’t something we like to think about, death impacts all of us, and there are no guarantees. But, given that insurance companies build their businesses on assessing risks, now feels like a particularly risky time to be doling out insurance that is dependent on people staying alive.
So, if life insurance is something that has crossed your mind over the last few weeks, we asked an insurance expert exactly how it all works during a pandemic – and whether or not it would even be possible to take out a new policy to cover yourself and your family.
James Buckley-Thorp is the CEO of Bequest Life Insurance company – the UK’s first pay-as-you-go life insurance company, backed by Aviva Insurance. He says that questions around life insurance are quite ‘challenging’ right now.
‘Most life insurers will or have already stopped their life insurance products due to the uncertainty that lies ahead,’ James tells Metro.co.uk.
‘This is especially the case with ‘whole of life insurance’. Term insurance is relatively more robust than ‘whole of life’, right now.’
Term insurance is a type of life insurance that provides coverage at a fixed rate of payments for a limited period of time, the relevant term. In other words, if you die during the time period specified in your policy and the policy is active, a death benefit will be paid.
While James says that most insurers will be stopping life insurance policies, his company is still offering policies, suggesting that there is no across-the-board consensus between companies – which means it is definitely still worth making inquiries.
‘We are currently in advanced talks with another underwriter to fast-track income protection into our offering, as we have noted other insurers starting to be more closed to selling these policies,’ explains James.
‘However, we are a digital life insurer, by the people for the people. Our entire structure is supported by some of the largest names in insurance.’
He adds that another change insurers might make is how they approach term insurance. So, even if you didn’t take out ‘whole of life’ insurance, term insurance might also be affected, depending on the length of the term.
‘Another outcome we might see is 10-year terms being removed,’ he explains, ‘with insurers pushing towards 20 or 30-year terms for life insurance. Hence why, we are focusing on being pay as you go, because we believe being flexible for our customers is better than being rigid.
‘Simply put, it’s better to inquire about life insurance now, rather than later.’
James says that the younger and healthier you are when you take out life insurance, the cheaper it will be.
‘We have policies that are substantial in their protection, and can be as low as £4 a month. Which is pretty good.
‘Say if you were 30, that would be a good premium.’
Life insurance is important for a number of reasons. Firstly, when you die your debts will be passed on to your family – including lengthy mortgages – which could be financially ruinous for your loved ones.
Also, dying is expensive. Life insurance can cover the cost of pricey funerals.
If you already have life insurance, it’s worth checking with the company to see if any updates or amendments have been made. However most say that they won’t pay out for critical illness cover if you get coronavirus – as most people recover.
However, in the sad cases where the illness does cause death, life insurance policies will cover that.
As an example, the Aviva website advises:
‘If someone has a life insurance policy with us and they pass away due to coronavirus, we’ll pay out, if the claim meets the terms and conditions of the policy.
‘Coronavirus isn’t covered on our critical illness insurance. But if you have complications from the virus that lead to conditions that are included in your policy – such as kidney, liver, heart or respiratory failure – the claim will be paid, subject to the policy terms and conditions.’
Life insurance is a smart thing to consider at any time, but these uncertain times mean everything is temporarily more complicated than it used to be.
If you’re considering taking out a new insurance policy – do your research. Call a variety of companies and make sure you look closely at the terms of a policy before signing up.
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source https://metro.co.uk/2020/04/13/coronavirus-uk-possible-take-life-insurance-covid-19-pandemic-12549613/?ITO=squid
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