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Securing life Insurance post-Covid-19 pandemic

During these uncertain times, the importance of having the right financial protection in place for your family has become even more imperative.

Life insurance is a form of financial protection that will pay out to your loved ones if you were to pass away during the policy term – helping to give you peace of mind that your nearest and dearest won’t struggle financially without you around.

But how does securing life insurance work during the Coronavirus pandemic? Award-winning life insurance broker, Reassured, explain the current process in the UK.

What’s changed after Covid-19?

While much of our day to day lives have changed as a result of the Coronavirus pandemic, not much has changed in terms of life insurance. The process of how life insurance works is still as simple as:

  • Apply
  • Make monthly payments
  • Claim
  • Payout

This means it can still be quick and easy to secure the cover you want.

Let’s look at these steps in more detail…

Life insurance application

The application process is the only area where there have been some minor changes. Now you will also be asked Covid-19 specific questions.

These can include questions about your risk of exposure to the virus, whether you’ve tested positive for the virus, if you’ve been in contact with someone who has tested positive and whether you’ve been advised to self-isolate.

Answering yes to any of these questions doesn’t mean your application will be declined. Instead, your application may be postponed until you have made a full recovery or until you no longer have to isolate.

You’ll also need to provide standard personal details such as your age, medical history, smoking status, level of cover, and length of cover. As well as the type of policy you want to take out, this can include:

  • Level term life insurance (payout amount remains fixed)
  • Decreasing term life insurance (payout amount reduces over time – ideal for protecting a repayment mortgage)
  • The whole of life insurance (lifetime cover that guarantees your loved ones a payout)
  • Over 50s plan (guaranteed acceptance for those aged 50 – 85, with no medical exam or need to provide medical information)

Monthly premium payments

Monthly payments for life insurance are known as premium payments. These are calculated using the personal information provided at the point of application.

The higher the risk the insurer perceives you to be, the more they will charge you for your premium. For example, a smoker may pay more than a non-smoker for life insurance due to the increased risk of lung cancer or heart problems that smoking can cause.

You will need to continue making premium payments for the term of your policy (or for the rest of your life in the case of whole of life insurance) in order for your cover to be valid.

During these unprecedented times, insurers haven’t increased their prices due to the increased risk of Coronavirus, and have tested positive for the virus won’t mean you’ll pay more for your cover.

During the Coronavirus pandemic, if you’ve fallen on hard times and cannot afford to make your premium payments, always let your provider know as they may be able to help. Simply stopping your payments would end your cover and your selfless investment would be wasted.

Making a life insurance claim

To make a claim, your loved ones would need to contact your provider after you have passed away and it’s likely they’ll need to fill in a claims form. The claims form will be sent back to the insurer for the claim to be assessed.

Once the claim has been deemed valid, the payout process can begin.

Receiving a payout

Life insurance payouts will be made to the named beneficiaries into a UK bank account. The COVID-19 pandemic hasn’t changed this process and payouts will still be made as per the terms and conditions of a life insurance policy.

A life insurance payout can be a huge financial help to your loved ones at a difficult time and can help take care of:

  • Mortgage payments
  • Rental payments
  • Bills and utilities
  • Childcare costs
  • Family living costs
  • Funeral costs

Without the funds provided by a life insurance policy, your loved ones would most likely struggle to find the money to cover all of these expenses.

Your selfless investment can help your loved ones remain in their family home and cover their day-to-day expenses, meaning there will be as little disruption to their lives as possible.

How can you secure cover?

You can secure life insurance in a number of ways. Either directly from a life insurance provider, from a comparison site or through a life insurance broker.

It’s unlikely you’ll get the best deal doing direct so comparing multiple quotes can help you to find a better deal on your policy.

While you could use a comparison site to compare quotes, you won’t get the quick and personal help you’ll experience by using a broker service.

A broker service, like the one provided by Reassured, can help you to save time and money by doing the hard work on your behalf.