COVID and life insurance myth busting!
COVID-19 affected many of our lives in ways none of us expected, and many of these changes are lasting long after the worst of the pandemic – but just how has the pandemic impacted life insurance?
According to a recent survey from Vitality of 2000 consumers, 10% of those interviewed said one of the biggest life lessons to come from the coronavirus pandemic is the need to protect themselves and their family’s future with life insurance.
More importantly, it also found that three in five (59%) had realised that life is too short and that anything can happen to them or their families.
More than a third of people said that the pandemic has made them more aware of the need for life insurance, rising to more than half for those aged between 25 and 34.
As concerns over a cold winter and increase in COVID transmissions grow, we are here to help ‘myth bust’ so that you are crystal clear on how COVID relates to your life insurance policy.
Are life insurance premiums more expensive due to COVID?
The most common questions we hear include:
“Are claims being rejected because of coronavirus?”
No, they are not. In fact, LV, one of the biggest insurers in the market, have recently published their claim statistics for 2020 which shows that they have paid out 99% of all life insurance claims in 2020. The total value of these claims adds up to over 72 million pounds!
In 2020, since the pandemic began, over 10% of claims were for COVID-19 which was the third most common cause of claim for life insurance with a total payout of £6.4 million.
“Are premiums more expensive because of coronavirus?”
Premiums have remained steady and largely unaffected.
The pandemic will have long lasting effects on our lives but thankfully, we haven’t yet seen a significant increase in premiums for life insurance as each policy is tailored to your age, health and lifestyle, amongst other factors.
Tip: If you have a policy in place which has guaranteed premiums, it means that the premium you pay will stay the same even as you get older.
“Do I need to answer more medical questions?”
To be accepted for most types of life insurance, you will need to complete the chosen insurers medical questionnaire to determine whether you will be accepted or not.
When it comes to COVID-specific questions, since the pandemic, there have been some questions added relating to coronavirus but they are mainly concerned with whether you have had the virus in the past few months and whether you have fully recovered or not.
We know that renewing your life insurance, or even taking out life insurance for the first time, can feel overwhelming, which is why we are here to help navigate you through the process and leave you with complete peace of mind.
Find out more about A-Plan’s life insurance, and feel free to get in touch with our friendly life team with any questions you may have.