Coronavirus, life insurance and Critical Illness cover: what will and won’t pay out?

Posted on

With more than two million confirmed cases of coronavirus worldwide and fears that up 80% of the UK population will fall ill as a result of the global pandemic, many people are looking to their insurance providers to clarify what will and won’t be covered.

If you have not received any clarification directly from your insurer, then here are a few facts that may help you understand your current position.

What does life insurance cover?

Whilst there are many different types of life insurance, strictly speaking, they should all do one important job – pay out if you die during the term of the policy. This relies on you having kept up to date with your premiums, answered all the application questions honestly, and, if you have a term life insurance policy, that you are within the covered period.

All life insurance policies will contain some special circumstances under which they will not pay. These, however, will vary from policy to policy. To be sure exactly which exemptions apply to your policy, you must take a detailed read through your policy documents or contact your provider for clarification. Some, for example, will not pay out if you are deemed culpable for your own death in some way.

However, the life insurance companies who have so far issued statements have all made it clear that they will be honouring all policies where death occurs due to the coronavirus pandemic.

What do the life insurance companies say about coronavirus?

In common with other major insurance providers, Zurich say that if a customer holding a Zurich life insurance policy dies of coronavirus, they will pay out following their “normal claims process and assessment”.

Aviva are also clear they will be paying out.

“With the news that Covid-19, more commonly known as coronavirus, is spreading across the UK we want to give you clarification around our claims and underwriting position.

“We’re continuing to pay all valid claims and committed to giving you access to valuable protection insurance. We remain a market-leading protection insurer for claim paid amounts.”

Vitality state that “Covid-19 or any other infectious disease which results in the plan holder dying, will be covered.” Beagle Street have stated the same.

While some insurers have not yet issued any statement regarding the Covid-19 outbreak, those who have make it clear that there is no pandemic or epidemic exclusion for life insurance.

This means if you have a current life insurance policy and you have continued to pay your premiums, your beneficiaries should receive a payout if you die from Covid-19 or related complications.

What about Critical Illness cover?

When it comes to Critical Illness cover, however, things become a bit less straightforward.

Generally, insurers have been saying that they will not pay out on Critical Illness cover as a result of coronavirus because it is not a specified illness under the terms of their policy.

They also state that most people who contract it go on to make a full recovery which is, thankfully, true. However, around 5% of those infected face critical illness as a result of contracting the virus, including respiratory failure, septic shock and multiple organ failure.

Additionally, medical professionals are now saying that some of those who are infected with Covid-19 and who do not die from it, do suffer from what are most likely to be lasting lung conditions. Under these circumstances, you may be able to make a claim, but this will depend on the exact wording of your policy.

Zurich, in answer to enquiries on this question, have stated that:

“Coronavirus is not a specified ‘Critical Illness’ on Zurich’s policy.

Under our ‘Respiratory Failure – Of Specified Severity’ definition, it is possible a claim might be presented but the opinion of our Claims and Medical Officer is that the coronavirus is unlikely to produce the permanent symptoms or impairment to lung function required to meet this definition.

We will consider any such claims presented on the basis of the individual circumstances”

In response to enquiries from members of the public who are understandably confused and worried, the Association of British Insurers (ABI) have attempted to bring some clarity.

Their advice is that customers should expect insurers to treat any claim for coronavirus in the same way they would treat other claims for Critical Illness cover. They also advise customers to note that Critical Illness cover is only paid out where it falls under the specific set of criteria laid down in the  .

All Critical Illness policies are required under these minimum requirements to cover heart attack, stroke and cancer, but beyond that, policies can and do vary. It may be that one policy covers for coma, respiratory failure and kidney failure – which may come about in the most serious Covid-19 cases – while others will not.

In other words, the only way to be sure what your Critical Illness policy will cover you or your loved ones for is to read your policy terms and conditions, or check directly with your insurer. It may be that while coronavirus infection itself is not a covered condition on any Critical Illness policy, the complications that can arise from it, are.

Contacting your insurer

If you have any further questions about your policy cover, then you should in the first instance consult your insurer. Be warned, however, that their phone lines may be very busy at the moment, so it may be better to check their website for information. Most providers have updated their websites to include answers to specific questions about Covid-19 for worried customers.

The ABI provides some reassurance that while this is a particularly difficult time for claimants and insurers alike, they are doing everything in their power to keep their operations running as efficiently as possible and to offer clear and up-to-date information to their customers.

If you have any questions about the life or Critical Illness cover you have in place, please get in touch with us.

Please note

All details are correct as of 24th March 2020 and are taken from each insurance company’s website.

We aim to keep our clients up to date on interesting and relevant financial news.

You can sign-up to receive our monthly newsletter by email, even if you’re not yet a client. Sign-up using the form below.

Client testimonials

I have always found Black Swan to be caring and understanding of my quirky lifestyle. I always feel they try to get me the best returns while respecting my current needs.

Sally Muir

A client since 2011

We would be very happy to recommend the support and service we receive.

Valerie Locks

A client since 2010

I have always been completely useless regarding finance - thankfully our financial adviser is not! I've retired with far more than I ever expected and investments continue to grow safely. So - thank you!

Bernadette Jane Warner

A client since 2000

Very happy with the professional service I have received and feel a lot happier now with my finances put in order.

Martin Field

A client since 2011

Julie Cooper was recommended to me by a work colleague. She has been very helpful, professional and has explained everything well. I would definitely recommend her services to anyone else who are interested in a financial review.

Steven Rooke

A client since 2018

…Service has been first class.

Hugh Fells

A client since 2012

My face to face meetings with Rob Young and Jessica Lyons have always been very open and understandable. My questions have been answered clearly and I have left feeling that my financial matters are in good hands.

Sandra Jack

A client since 2000

[A] safe pair of hands in a complex financial world.

Gary Middlehurst

A client since 2003

A reliable company with good communication skills and good knowledge of the financial markets.

Alan Evetts

A client since 2014

Maureen Pembridge is a long-time trusted advisor to our family. The market might fluctuate but her attention to detail is consistent.

Linda Burnard

A client since 2000

I am pleased to recommend Julie as a trustworthy financial advisor. She explains financial jargon in plain language, and always listens carefully to my particular financial needs and has helped me make the best of my savings.

Carolann Samuels

A client since 2010

I have always been satisfied with the way that Black Swan has handled my account. And I have always found the staff very helpful whenever I need to call the office.

Robert Anthony Matthews

A client since 2012

An excellent personal service from a person I know and trust.

Michael Dalton

A client since 2010

I am getting a very good services from Black Swan, they have got my investments sorted out which was in a bit of a mess.

Roy Jakens

A client since 2012

A good, efficient team providing clear ideas to shape a winning strategy.

Adrian Michael Levenstein

A client since 2011

Black Swan is a company to be trusted, with friendly staff and professional advisors.

David Brian Jennings

A client since 2017

I have been with Black Swan for many years. I have never wished to change anything. They give a good straight forward service.

Martin Barrett Brooks

A client since 2010

Andy Peters has been invaluable in firstly combining several pension pots and then giving excellent investment advice. It has given us a great deal of comfort to know that our financial affairs are in such good hands.

James Guillum Scott

A client since 2014

I find my financial advisor easy to talk to and feel that she understands my lifestyle. She is always available for help when I need her and explains in words that I can understand.

Margaret Ena Glasgow

A client since 2000

Andy is a first rate Director, excellent communicator and leader.

Ross Perry

A client since

Black Swan Financial Planning and Andrew in particular, are very clever at working out how risk averse we are, and coming up with solutions that we feel comfortable with. We are happy in the knowledge that we can continue to enjoy a comfortable retirement. Andrew Peters is a very, very friendly person who is great to chat to and easy to deal with. He explains things very clearly in layman’s terms, and if we still don’t understand, he explains it until we do!

Alan & Jane Dyer

Clients since 2012

We have always found Rob [Young] to be very approachable and knowledgeable. We have every confidence in the advice given and feel comfortable with the decisions we’ve made. There are certain opportunities that we wouldn’t have known about if Rob hadn’t brought them to light, which makes the advice good value for money as far as we’re concerned.

Peter & Pauline O’Halloran

Clients since 2013

Rob [Young] is extremely knowledgeable. I knew nothing about the different types of trusts which will not only secure my income in retirement, but also leave a legacy for my children. I’m glad that I sought his advice when I did.

Sarah Wilson

A client since 2015

I am extremely happy with the service afforded to me by the company and my adviser Julie Cooper.

Geoff Coxell

A client since 2010

My wife and myself have been dealing with Black Swan for a number of years. We have met with different representatives from the company over the years and have found all very helpful in their own way. We met with James [Anderson] a few years ago and found him very helpful and knowledgeable. He keeps in contact with us on a regular basis. We find the Company information very helpful and we feel very secure with our finances.

Andrew Kirchen

A client since 2015

I have always found my adviser to be easy to contact, very professional in his approach, yet friendly and understanding. I have a sense of an experienced company behind him, really on the ball financially and with good standards.

B McBean

A client since 2011

Partner with the most reliable and experienced team of advisers

Enter your details & we'll be in touch to discuss your needs.
Alternatively, contact us directly and speak to a member of the team.





    Subscribe to our newsletter