The World Health Organization (WHO) has declared the coronavirus or COVID-19 as a pandemic. This deadly virus has spread to more than 187 countries affecting more than 4 million people worldwide. The total death toll has passed over 283,000 mark with the majority of the deaths happening in USA, UK, Italy, and Spain. In India, more than 67,000 people have been tested positive for this deadly virus, which is a concerning number. More than 2,000 people have lost their lives to coronavirus.
So, now the important question arises, will a life insurance policy cover the death of a policyholder due to this deadly virus? Plus, will you be able to get a term life insurance after contracting the infection?
Existing life insurance policyholders
If an individual has passed away due to coronavirus and had a life insurance policy, the nominee would get the death benefit as the sum insured. The nominee would receive the death benefit once a valid life insurance claim is filed.
The death benefit is the agreed and predefined amount of sum insured payable to the beneficiary or the nominee by the insurer upon the demise of the insured person.During buying the policy, the policyholder or the insured person lists out the name(s) of those nominee(s) who would receive the death benefit in case the policyholderpasses away. Nominees can verify the sum assured in the policy document.
To sum up, existing life insurance policyholders are covered against death by a pandemic like the coronavirus.
If you buy a policy now, will it cover COVID-19?
If you are considering to buying a life insurance policy at this point in time amidst a global health crisis, then you should keep be mindful that insurers decide the premiums of a policy based on your medical history and health. Hence, it’s rational to assume that a pandemicsuch as the coronavirus would have some impact on your term insurance premium, acceptance, term insurance age limit, etc. given that you are currently in the application process stage.
If your policy is in the initial stages, the insurer might hold or even reject your application if you have already contracted or are in close proximity to someone exposed to the deadly virus. As long as the policyholder has correctly disclosed all factual details while purchasing the life insurance policy, wherein the policyholder was not infected with the virus, the death benefit claim would be payable to the beneficiary even if the demise arises due to the coronavirus infection later.However, every policyholder should ideallyscrutinise the exclusions of their life insurance policy cautiously to know the various circumstances where the policy will not be covered.
What if the insurer considers COVID-19 under critical illnesses?
Usually, life insurance policies don’t plainly deny payment of benefit for deaths caused by any illness. Nonetheless, one needs to consider the conditions of the life insurance policy add-ons, whose benefits wouldbe rendered only if those conditions are met. For example, for life insurance policies with critical illness benefits, claims might not be entertained in an occurrence where medical advice was not adhered to/by the insured person.
It is imperative to secure your life by getting not only an adequate health insurance policy, but also term insurance that shields your loved ones in case of an unfortunate incident due to any such virus. You can use a term insurance calculator to calculate an estimate of required monthly premium to meet your sum amount.
Owing to several term insurance benefits, term insurance is undeniably one of the most basic life insurance plans available in the insurance market these days. Furthermore, the number of patients infected with coronavirus are snowballing every day and you never know when you might become a victim. Stay safe. Remember, through every dark night, there is a brighter day after that.