Life insurance and the Covid vaccine – Why you might need to be jabbed to get cover

Category: News

When the coronavirus pandemic first arrived, scammers were quick to take advantage. Fraudsters looked to capitalise on our uncertainty and fears surrounding Covid-19 and, once vaccines began to be developed, they looked to prey on our concerns about these too.

One scam, reported by Which? and believed to have originated in Australia, tried to suggest that life insurance policies might refuse to pay out if a policyholder died from complications after receiving the Covid vaccine. Similar false reports followed on social media.

It is true, however, that coronavirus has caused difficulties for the industry. If you’re taking out insurance for the first time you might face additional questions and some vulnerable groups might find it harder to get insured. These issues only highlight the need to shop around.

As the vaccine rollout continues – and the double-vaccinated are invited to receive a booster dose – further speculation is rife. Might some insurers take their lead from Covid passports and be unwilling to provide life cover where the individual applying hasn’t been vaccinated?

If you are concerned about how the vaccine might affect the life cover you have or any protection policies you take out in the future, keep reading.

Getting cover if you are unvaccinated might be more difficult in some circumstances

Recent reports suggest that the elderly, and those classed as vulnerable, who refuse a Covid vaccine could find it more difficult to get life cover.

The Times suggests that insurers have been more reticent to provide protection policies to those with health conditions that put them at higher risk. The number of Brits in this category is around 3.7 million.

However, in recent months, at least three insurers – Legal & General (L&G), Scottish Widows and Guardian 1821 – have confirmed that if you are double-vaccinated, you will have the same chance of getting approved for coverage as someone without pre-existing conditions that would make you more susceptible to Covid-19.

You might be asked additional questions, and some groups – for example, those over 70 who have diabetes – could still face more difficulty in getting cover than before the pandemic.

Understanding the cover you have, and shopping around, is even more important

If you are worried about whether you are protected, first, you’ll need to think about the cover you already have.

You might have policies tied to previous jobs that you have since forgotten about, or term plans whose term has now expired.

Once you know the cover you have, you’ll be able to see the gaps and think about the right policies to fill the void.

Income protection

If you are still working, you might consider an income protection plan to cover your lost wages if an accident or illness prevents you from working.

After a deferred period, you might receive a lump sum or regular payments to cover a percentage of your earnings and help your family continue to pay household bills.

Critical illness cover

Critical illness will pay out a lump sum if you are diagnosed with certain conditions.

A stroke, heart attack, and some cancers are included, as are some conditions such as multiple sclerosis.

A critical illness plan is unlikely to pay out for coronavirus, but neither will your vaccination status have any effect on a potential payout.

Critical illness cover will only pay out once.

Life insurance

Life cover can provide a lump sum on death but there are several types available, and it isn’t always easy to choose the right one. You’ll have to think about:

  • Term assurance, which pays out a set amount if you die within a certain term
  • Decreasing term assurance, which pays out if you die within a certain term, but the specified amount decreases over time
  • Whole of life cover, which guarantees to pay out on your death, whenever it occurs, resulting in a generally more expensive plan.

Which? recently asked insurers whether having the vaccine would alter the likelihood of life insurance paying out and the answer was “no” from all insurers.

The insurers questioned also confirmed that life cover would likely pay out on death from coronavirus, as long all other conditions were met. “Other conditions” might include your premiums being up to date and the policy information you provided being accurate.

Your vaccination status is highly unlikely to be considered.

Get in touch

The additional questions you might be asked, and the rising cost of cover for some groups, only confirms the need to shop around.

We can help you decide on the right level of cover for you – as well as helping you to understand the cover you already have in place. This will give you confidence that you and your family will be protected, no matter what the future brings.

If you would like to protect yourself and your family, we are here to help. Please email or call us on 020 8891 0711 to discuss how Globe IFA’s expert financial advisors can help you.