How Covid-19 has affected your insurance policies

BY ANDREW STEWART

These last few days have been surreal. It’s hard to know what’s going to happen in the next weeks but my view is to try to stay positive, as much as we can.

I’ve been using this time to do more things that I enjoy: listening to audiobooks, regular at-home yoga and of course spending more time with the family (not that I have a choice right now lol). I’ve reduced how much time I watch the news. I found it was adding more stress to the situation, but I do check for recent updates.  Staying in contact with loved ones abroad, friends and clients across Canada is now a full-time job.

This can also be a good time to reassess what’s important in your life. Relationships that don’t support or enhance, your business or profession from top to bottom and your financial plan. If you are struggling financially, track your spending, figure out what you can live without, learn how to create a budget, and please start an emergency fund. There is no better time to learn how to manage your finances than the present.

Switching gears to what’s happening across the board with insurance companies. How it affects your current policies and how you can take advantage of new policies and procedures being put in place due to the Covid-19 pandemic.

Life insurance policies remain unchanged. If an insured were to pass away due to Covid-19 the death benefit will be paid out required by the insurance companies. If your life insurance policy has a cash value as a component, you could potentially access some of that cash if your current cash flow has been affected by COIVD-19.

Disability insurance is designed to replace your income if you’re unable to work due to sickness or injury. With disability insurance, you likely will not be entitled to any sort of financial relief unless you have been tested positive for COVID-19 or have symptoms that are preventing you from working. The main issue is the waiting period that most disability policies have within their contracts, which can be a 30-90 day waiting period. Time spent in self-quarantine or job loss due to economic fallout caused by the coronavirus is not covered.

Critical illness insurance will not pay out a claim if you’re diagnosed with Covid-19. The reason is that Covid-19 is not listed as a specific covered illness.

Applying for and getting insurance coverage is a big question now. Advisors and insurance companies are not exempt from following Covid-19 health guidelines and almost all business practices have been encouraged to move to a Non-Face-to-Face environment. Because of this, insurance companies have loosened their underwriting restrictions.

Since most paramedical service providers have suspended their activities until further notice we still want to provide the best offer, at the earliest convenient time. Insurers have adopted using an accelerated underwriting approach.

Ages 0 to 50 years old can now purchase up to $1,000,000 of life insurance without having to complete a medical exam and up to $200,000 of critical illness coverage without a medical exam. This means your advisor can have a virtual meeting with you to explain the product, complete an electronic health questionnaire and have your policy delivered to home or have an eContract emailed, all without having to break the social distancing protocol.

If you have recently traveled, your application will be postponed (depending on where you traveled) until you have been back in Canada for a minimum of 14 to 30 days. If you’re currently diagnosed with Coronavirus, most carriers will not be able to offer coverage at this time.

I’ve been consulting with clients virtually for over three years and most enjoy the convenience and ease conducting business this way provides.