Posted 24 May 2020

How is COVID-19 changing life insurance for people with medical conditions?

We’re keen to keep people up to speed with the latest developments to life insurance underwriting in the UK during COVID-19. We wrote a recent blog after the first phase of changes to underwriting rules for life insurance which explained how things had changed initially due to Coronavirus.

Since then there has been a second wave of changes which has impacted many people looking for life insurance, especially people with medical conditions. It is always going to be difficult for insurers to strike a balance between trying to offer cover to people and protecting the existing policyholders. In this recent round of developments, we have seen insurance providers becoming even more cautious with offering terms.

Unfortunately currently we’re seeing vast numbers of applications either being postponed for several months or even declined cover altogether. We’ve spoken to a number of the senior underwriters within some of the insurers and they all were uncertain of what might happen in the near future.

In this article we’ll try to explain how this might impact you if you are looking for life insurance and especially if you’ve got a pre-existing medical condition.

This information is specifically for people with pre-existing medical conditions who are trying to get life insurance at the moment. If you’ve had or got symptoms of COVID and you’re wondering what you can do about getting life insurance then you should speak to one of our advisers and we’ll help you to sort out the best way forwards for you. It might be that you’ve tried to get cover and been told it’s not possible at the moment but that’s not necessarily the best advice so let’s see what we can do.

Why has Coronavirus changed life insurance underwriting?

Some of the reasons why life insurance terms have changed in the past several weeks and months are extra mortality risks (higher probability of death) and levels of uncertainty never seen before. For certain people classified as ‘higher risk’ because of their health or medical conditions, it has become difficult to predict mortality.

Life insurance underwriting is based on historic data which shows how likely someone will be to claim due to their health within a period of time. With the current levels of unknown risks connected to COVID-19, it’s now become incredibly difficult to calculate this risk.

Which medical conditions have been affected most?

Unfortunately the changes are currently mor or less the same across the board so regardless of your medical condition. Recent news based on statistics has shown that there are certain medical conditions specifically linked to being higher risk because of Coronavirus.

Higher risk medical conditions include:

  • Diabetes: Due to the added complications that diabetes brings around cardiovascular risks and other stresses on the body. It has been suggested that this specifically causes an elevated risk if contracting COVID-19
  • Respiratory Conditions: There are a number of major respiratory conditions which have also been identified to be specifically higher risk, these include conditions such as Asthma
  • High BMI: People who are obese or who have a higher than normal BMI could also be at risk of developing more severe symptoms from Coronavirus
  • Age: Anyone who is over a certain age has also been identified as being more at risk if suffering from symptoms of COVID. This is simply because of how the virus attacks the body and how strong the immune system is to be able to deal with that
  • Ethnicity: This is potentially the strangest of all of the higher risk categories and the one which makes the least sense. It has also been identified that people from certain ethnic backgrounds are considered to be higher risk

When is life insurance going to get back to normal after COVID-19?

As part of our role in the industry as experts, we’re always keen to understand what’s happening and to campaign for our clients. We’ve had a number of in-depth conversations with several senior underwriters from some of the UK’s biggest insurers. Most of the conversations have been around what has led to the decisions to make changes as well as considering what might happen in the future.

Clearly there’s a lot of uncertainty in the current situation around what’s happening in the UK and the rest of the world. Some countries have managed to control the impact of Coronavirus and limit the number of people contracting the virus as well as fatalities. Unfortunately the UK is one of the worst affected areas and this can be attributed to a number of factors:

  • Population density
  • Elderly population
  • Population living with medical conditions

Based on current projections, it is being suggested that we would expect the current restrictions to last for a period of 6 months. This is currently an estimate and this figure could change dramatically depending on how the next several phases of lockdown goes.

What’s happening to life insurance because of COVID-19?

There’s been some key changes to how life insurance is being underwritten through the Coronavirus pandemic. Some of these include added limits to maximum levels of underwriting being accepted, maximum sum assured and maximum age.

The main areas which have changed in the past couple of weeks are:

  • Underwriting limits: We’re now finding that some insurance companies are imposing lower limits to the levels they will consider. Previously we reported on underwriting limits being slightly lower than normal, however the recent changes have gone significantly further
  • Age restrictions: Recent signs have shown that insurers are imposing further restrictions to the ages of people that they will consider for life insurance

Through this current crisis and ongoing pandemic, we’re seeing unprecedented limits being imposed on life insurance limits. We will continue to report on developments as they happen over the coming weeks and months.

iam|INSURED is committed to helping our customers and making sure that they get fair treatment from insurance companies. We regularly campaign for fairer terms with all of the top insurance providers in the UK to give you better cover at an appropriate price.

More information about Coronavirus:

NHS 111https://111.nhs.uk/covid-19/

NHS Choiceshttps://www.nhs.uk/conditions/coronavirus-covid-19/

Gov.UKhttps://www.gov.uk/find-coronavirus-support

Coronavirus financial help:

If you are suffering financially and need support because of Coronavirus then you might find the following pages useful.

Money Advice Servicehttps://www.moneyadviceservice.org.uk/en/articles/coronavirus-what-it-means-for-you

Citizens Advicehttps://www.citizensadvice.org.uk/debt-and-money/if-you-cant-pay-your-bills-because-of-coronavirus/

MoneySavingExperthttps://www.moneysavingexpert.com/news/2020/03/uk-coronavirus-help-and-your-rights/

If you need any more information about Coronavirus and life insurance then you can call our team of experts on 01244 732895… our advice is absolutely FREE

Daniel Sharpe-Szunko