Pandemic Life Insurance in Today's World

Posted on January 29, 2021

As the COVID-19 pandemic rages on throughout the world, it's important to stay safe. But if you do get COVID, you should consider what might happen if you pass. That's where some sort of pandemic life insurance comes in.

While insurance policies don't directly cover pandemics, they can cover deaths from a disease. We recommend reviewing your life insurance policy to better understand how it relates to pandemics such as Covid 19.

On that, insurance companies and brokers are now asking additional questions while opening a life insurance plan.  Some of the most common ones are:  

  • Have you experienced any of the following signs or symptoms within the last 14 days?  
    • Fever
    • Persistent cough
    • Sore throat
    • Flu like fatigue
    • Loss of smell or taste
    • Nausea, vomiting and/or diarrhea
  • Have you been advised to be tested for Coronavirus (COVID-19), or are you or have you been in
    close contact with anyone who has been quarantined for or diagnosed with Coronavirus (COVID-19)?
  • In the past 21 days have you returned from travel abroad?

Types of Life Insurance

When determining if you have pandemic life insurance coverage, you should consider what type of policy you have. In most cases, the life insurance process will cover you if you die from COVID-19 or related complications.

Consider two common types of life insurance that you may have.

Whole Life Insurance

 As in its' name, whole life insurance covers you for the duration of your life.  As long as you continue to pay the premiums, your policy is in force.  This allows you the peace of mind knowing your family will be covered regardless of how long you live.

Term Life Insurance

Term life insurance refers to policies that have a set term, generally from 1 to 30 years. If you outlive the term of your policy, you forfeit the benefits.

Reasons for Exceptions

It's important to review your policy to make sure you aren't at risk of an exception.

While they aren't common, exceptions are a possibility and most definitely worth understanding.  Some of the most common exceptions are: 

Overdue Insurance Premiums

While the Canadian government has done its best to help Canadians during this tough financial time, many are still finding it difficult to pay their bills.

Unfortunately, not paying your premiums opens the door for your insurance company to reject any claims you file. If possible, try to keep up to date with your payments.  Having your life insurance policy intact, especially during such an unpredictable time, is a safety net for both you and your family.

Incomplete or Inaccurate Application

The extensive personal information you indicated on your application helped the insurance company create your policy and determine a premium. But if you were dishonest on your application or it wasn't thorough, that may result in a rejected claim.  

Ensure that your income, weight, and other details are as accurate as possible.

Policy Start Date

The next thing to consider is when your policy began. If it started prior to contracting COVID-19 or related complications, it should cover you.

You may also have issues if you got your policy within the last two years. During that time, your insurance company can contest your policy, and they may review your application and materials in more depth.

Death by Accident

We recommend ensuring that your life insurance policy covers more then just death by accident.  It should cover any death.

If not, switch policies if you can so that you can get the coverage you need. Your family may still have issues filing a claim, but it can still help to have more coverage for the future.

How to Check Your Life Insurance Policy

If you're afraid you may die from COVID-19 complications, you should review your insurance policy. When you have life insurance in Canada, you can make sure you have the best policy for you.

Whether you want to add coverage or make sure you don't have any outstanding bills, you should review your policy. That way, you can prepare in case you die from COVID-19 or something else.

Here are a few tips to ensure that your life insurance policy is right for you.

Contact Your Insurance Company

They can tell you the basics of your plan and answer some of your pressing questions. If they aren't able to provide answers, they can most certainly point you in the right direction.  

Review Your Policy

Review your policy as best you can. Check to see if it's whole or term life. If it's term life, see when the term expires and if you need to renew it soon.

Ensure you have enough coverage. While your premiums may go up, it may be worth the increase, especially if you are in a higher risk category for contracting Covid-19.

What If You Can't Afford Your Premium?

In December 2020, Canada had a net loss of 63,000 jobs, making it difficult for folks to pay their insurance premiums; especially when it became more important to prioritize things like food and shelter.

Even with financial support from the government, paying may still be hard. Fortunately, you have other options.

For one, you can contact your insurance company or agent to talk about your options. While you don't want to lose coverage, you may be able to switch to something cheaper until you get a job.

You may also be able to use cash value accumulation if you've had your plan for years. When it comes to life insurance, you can start building that value when you pay your premiums.

After a few years, you may be able to use that cash value to cover your premiums for a few months. That way, you can keep your current policy and not worry about losing coverage.

How to File a Claim

If you do die from COVID-19 or its complications, your family can file a claim. Educating them on the correct steps on how to file is key.   This way, they receive the payout sooner then later which is beneficial especially if your family is struggling due to the pandemic

Get the Death Certificate

The first thing your family will need to do is get your death certificate. They will need proof of your passing.

Your family will need to contact the vital statistics office in the province in which you died. They'll need to send a death certificate request directly to that office since Canada doesn't have a central office.

Death certificate fees depend on the province, so you can contact the vital statistics office for more information.

Contact the Insurance Agent

After your family has the death certificate and any other records, they can contact the insurance company or agent. The agent can help go through the paperwork to file your claim.

Your family may need to talk over the phone or video chat, depending on pandemic restrictions. But if the situation is safe, they may be able to meet the agent in person.

Your spouse or children may want to organize your files before the meeting. That way, they can provide updated information to the insurance agent to get the most accurate insurance payout.

Finish and Request Payment

Once your family finishes any paperwork or procedures, they can submit them to the insurance company. The company will review the paperwork and make sure everything looks good.

Of course, there could be discrepancies between the paperwork and your initial application. To avoid that, try to give your family access to a copy of your application before you die.

That way, your family can include the right information. Then, they can cash in on your life insurance policy.

How Do You Get Paid?

When your insurance company reviews the paperwork, they can pay your family in a couple of ways. Your family can request a lump sum of the entire payout or request installment payments.

They can also talk to the insurance company to discuss getting a cheque or direct deposit. You can ask about these things as well. That way, you can make the life insurance process easier for your relatives.

What If They Deny a Claim?

As much as you don't want to think about it, insurance companies do sometimes deny claims. And with COVID, life insurance companies are no exception.

The first thing to do if they deny a claim is to contact the company. They should give you an explanation for why they didn't accept the claim.

If the reason isn't accurate, you can then contact local authorities for help with your claim. 

And if that doesn't work, you can pursue further litigation with a lawyer. A lawyer can help your family go through the case and get the money they deserve.

Understanding Pandemic Life Insurance

While pandemic life insurance isn't a separate policy, it's important to have coverage during a global health crisis. It's even more crucial if you're at risk of COVID-19 complications.

Luckily, you can get pandemic life insurance or check your current policy. That way, you can know if you have the coverage you need.

Do you need to get new life insurance coverage? Get a quote today.

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