How Will The Coronavirus Impact Your Life Insurance

The CoVID-19 pandemic has wreaked havoc across the financial markets, stalling all economic activities. The life insurance sector, too, has been affected, due to increased health risks and death claims. Since a disease like the CoVID-19was never accounted for in the term insurance policies, there is a flurry of conjectures as to the impact this pandemic will have on the life insurance sector.

The primary function of life insurance is to provide security to your dependents, and dear ones should any unfortunate event befall on you. However, there is a lot of speculation about whether death due to coronavirus is covered under life insurance. We answer some of the most asked questions.

It is pertinent to note that some instances of deaths are not covered under the life insurance like death due to a pre-existing health condition and death caused due to intoxication.The insurance company will reject the insurance claim if the death of the policyholder falls under the specified categories, and the nominees will be denied the benefits of the life insurance policy. However, coronavirus does not fall under the term of ‘pre-existing health condition’. If an existing life insurance policyholder passes away due to coronavirus,the beneficiaries or nominees will be eligible for the death benefit. The life insurance or term insurance benefit will be duly paid to the nominee upon filing a valid life insurance claim. Thus, the nominees of existing life policyholders can avail all the benefits of life insurance. However, it must be borne in mind that in case of life insurance, the period should not have expired and the death due to coronavirus must have occurred within the term. Only then can the nominees be granted the benefits of the life insurance policy.

Furthermore, life insurance also has Critical Illness Benefit Rider, which provides that if the policyholder dies of any critical illness, then the nominees will get an additional sum of money as specified. In light of the present situation, coronavirus too should fall under this category. Consequently, death caused due to coronavirus will mean that the nominee of the deceased policyholder will get the add-ons along with the death benefit.

Doubts are also arising whether a policy purchased during this pandemic will cover CoVID-19. Factors such as age, gender, medical record and profession are taken into consideration by insurance companies to determine the quantum of premium and assess the risk. The insurance company may approve the insurance application if they deem the applicant to be under low or no risk of contracting the coronavirus. However, if a person is already infected, then the insurance company will reject the application.

This global crisis has cleared one fact, and that is- to have the foresight of purchasing a life insurance policy and secure your family from any unprecedented and unfortunate event.The benefits of life insurance far outweigh the price of premium that one needs to pay.