Posted 24 May 2021

Going, going… gone – the end of Covid limits for life cover

Life insurance has been limited for many since we first heard the word ‘Coronavirus’ at the beginning of 2020. Insurers around the world have all been scratching their heads and trying to work out how much they will be impacted by Covid.

Some insurers have been more cautious than others but overall, life insurance options have been limited for customers with pre-existing medical conditions.

Every insurer in the UK reacted to the pandemic within the first several months by restricting underwriting. This ultimately meant that certain people with medical conditions including severe diabetes, heart conditions, cancer, strokes were unable to access cover.

Does this mean I can now get life insurance for my family?

You might now be able to get life insurance to protect your family or your home if you’ve struggled over the past 12 months. Life insurance limits have been reduced during the pandemic to help protect people who already have cover.

If you’re still concerned about what might happen to your family if you pass away then you should check the current limits.

Most families have still been able to get cover during the pandemic which is positive, however, this hasn’t been the case for everyone. If you’ve got a pre-existing medical condition then you might have had problems getting cover.

What is life insurance underwriting?

Every life insurance policy sold in the UK goes through an underwriting process. This can either be online through an application or manual underwriting which is completed by a human.

Each insurer has its own underwriting criteria that mean they will view certain risks differently.

How does life insurance underwriting affect me?

If you have a pre-existing medical condition such as diabetes, cancer, or heart disease then you would go through an underwriting process. This might be an automated online process or a manual process through an underwriter.

Every insurer has its own underwriting criteria which are how they view risks such as:

  • Pre-existing medical conditions
  • High-risk occupations
  • Dangerous activities

This means that some insurers might be better for you than others because of how they view certain risks.

How has life insurance underwriting changed post-Covid?

This week has seen yet another life insurance provider remove some of the restrictions that they had imposed for Covid. We are now seeing a relaxation of the limits and rules that have been imposed by insurers since March ’20.

You should now find that you will have a greater choice of insurers and increasingly be getting more options.

Some of the main things that have changed over the past couple of weeks include:

  • Higher upper age limits
  • Increase on risk restrictions
  • BMI levels increased
  • Medical conditions limits increased

We are now finding that we can get more people covered than we have been able to since the beginning of the pandemic.

Is life insurance the same as it was before Covid?

No – unfortunately, there are still some limits in place that are not the same as they were before Covid. Even though things have improved, it’s still not quite the same levels of tolerance to what they were previously.

You still might find that some insurers are cautious when it comes to life insurance underwriting. This isn’t necessarily a big problem as you should still have other options, even though the choice might be limited.

Is life insurance more expensive because of Covid?

No – life insurance rates have not changed during the pandemic so you should still be paying the same or similar premiums.

We still aren’t sure whether life insurance rates might change in the future but they are still very similar at the moment. Some of the things that could impact premiums in the future could be increased claims figures or higher processing costs.

Life insurance rates have gradually dropped over the past two or three decades to where they are today. This is because of greater competition in the industry and improvements to efficiency levels.

Can I get life insurance if I’ve been refused during Covid?

It is possible for people to get cover now who have been refused or postponed cover through the pandemic. Covid restrictions might now mean that you are now able to get a policy where previously it was declined.

If you were refused or postponed cover through the pandemic then you should review the situation now to see if anything has changed.

Does the vaccine affect life insurance premiums?

No – currently there is no difference in life insurance premiums or underwriting for people who have had the vaccine.

When you apply for life insurance currently you will be asked questions about Covid that are the same now as they have been for the past 12 months.

Covid questions include:

  • Have you been tested positive for Covid in the past 30 days?
  • Been advised to self-isolate
  • Had a new or continuous cough, and/or high temperature
  • Lost your sense of taste or smell

Ultimately if you have had Covid or symptoms of Covid in the past 30 days then you will just need to wait for a short period of time.

What happens next?

Life insurance has been impacted by Covid as much as many other services, especially those connected to medical conditions. As the world returns to normal we should see a similar trend towards some kind of normality with life insurance.

It may still take several months from now to return to where we were before Covid or at least close to that state.

Daniel Sharpe-Szunko
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