Life Assurance Cover…following Covid-19

If you’ve had COVID-19 and now want to set up a life assurance policy, you may be wondering where to start. We previously discussed the impact of Covid-19 on various protection plans and as the pandemic has evolved over the past two years, so too have the requirements for applications.

Will COVID-19 impact my ability to get life assurance?

If you had COVID-19 and did not require an in-patient hospital stay, are now back at work, and you have fully recovered with no other significant underlying condition, your application should proceed as normal. In general, people are not refused life assurance for this reason.

After having COVID-19, is there a waiting period before I can get life assurance?

The general rule in life assurance providers is that once you are one-month post-COVID, and fully recovered, you can apply as normal.

Assuming your application is accepted at standard rates, you will be quoted the normal premium rate for life assurance. Note, this one-month post-COVID period applies to applications for mortgage protection life cover as well.

Has COVID-19 altered the life insurance market?

Sadly, statistics have shown that COVID-19 deaths occur more often in elderly people, and people who have significant underlying health issues or conditions. Due to this information, the insurance market in Ireland and in the UK in general is more limited when offering cover to those with significant underlying medical conditions.

This means that a very small number of people who would have been eligible for life assurance before the pandemic are temporarily unavailable to access this cover, regardless of whether they have had COVID-19 or not. That said, most providers look at every application individually, taking all details into account, to see if it’s possible to go ahead with life cover.

What happens if I have a serious underlying condition, but I’m also fully vaccinated against COVID-19?

If you have a significant underlying condition but are fully vaccinated, this is considered a positive factor when applying for life assurance.

Does my occupation make a difference to my life assurance application?

Applications for life assurance cover are treated equally, irrespective of an individual’s job or career. For example, health care or frontline workers are not treated any differently due to COVID-19.

If a person with a life assurance policy has an adverse reaction to a COVID-19 vaccine and death occurs as a result, will the policy sum be paid to the beneficiaries?

Yes, they will be covered under their life policy should this occur.

Do I have enough Life Assurance cover?

It is understood that if you plan to purchase a property in Ireland, you will be required to have a Mortgage Protection policy in place. This policy is to pay back the loan amount in the event of death.

Is this enough life cover? Depending on your age and whether you have a family or dependents, then no, Mortgage Protection alone is regularly not enough.

Why would I need more Life Assurance cover? A salary coming into a household is used for bills, loans, savings, and other big life events. If this salary ceases in the event of death, a replacement will be needed to cover the shortfall. If you have a young family, you will need more cover as you will need any benefits to last for a longer time.

How much is enough? We tend to avoid thinking about losing our loved ones, let alone the financial consequences. There is more than one way to work out how much life cover one might need. A basic starting point is to multiply your gross salary or your household annual expenses by a factor of eight.

The following quotations are an example of the cost of Life Assurance for a couple who are non-smokers and with the option of conversion (this allows you to convert your policy before the term ends to a new policy without the need to provide medical evidence). The term is for 10 years, and the cover is €250,000.

Age 30 € 23.19 per month

Age 40 € 40.41 per month

Age 50 € 87.52 per month

You may not need extra Life Assurance or less cover in the case where; your dependents are financially independent, you have death-in-service benefit through your job, you have substantial savings, or you have investments or a property which could provide an income or be sold.

€100 For Cover That May Only Cost €70???

Our new financial planning system has been hugely successful and popular in assisting clients with setting budgets and plans in place for their future. We try to get people to visualise what they would like to have as a goal, whether it is to pay off a mortgage early, retire early, travel the world or simply provide for family later in life.

Another handy way it can help is to configure whether a person has enough protection in place. Whether it is mortgage protection when purchasing a home or perhaps income protection for a self-employed person, the first question we ask is …how much have you got to spend? This is a great starting point as we can then provide various quotes to accommodate this figure without going over budget before we have even begun!

The following is an example of a quote for Joe Bloggs who is a married, 35-year-old, non-smoker who told us that he has €100 as a monthly budget for his protection needs. In his case, the three main areas he wanted to review was protection for his income, life cover for his family and specified illness cover.

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After we provided Joe with these quotations, we were able to inform him that he can claim tax relief on €75 of this cover at his standard tax rate (20% or 40%). This meant that he could save €15 to €30 a month bringing the total cost (€100) of the cover down to as little as €70 per month.