Income protection insurance Coronavirus

Statistics show that one in four adults have been left financially vulnerable and in debt due to the fallout from the COVID-19 pandemic.

With 14.2 million people now with low savings or erratic earnings[1], the pandemic has had many thinking about their finances and what they can do to protect themselves during these unprecedented times.

Income protection is designed to pay out a percentage (up to 70%) of your usual gross income to help cover financial commitments if you’re too ill or injured to work.

Income protection insurance can help to cover:

  • Mortgage or rental payments
  • Bills and utilities
  • Childcare costs
  • Other daily livings costs
  • Outstanding debts (such as credit cards or loans)

Thankfully it’s still possible to take out income protection whilst Coronavirus is still prevalent, but has anything changed?

Keep reading to find out everything you need to know about taking out income protection during the COVID-19 pandemic…

Why not speak to an expert?

If the Coronavirus pandemic has got you thinking about how you can protect your finances, then why not talk to a friendly member of our team?

We have over 10 years of experience in helping families secure the right financial protection.

We can take your personal circumstances into consideration to help you find the right solution that meets your needs and that’s within your budget.

What’s more, we compare quotes from all UK providers to help you save time and money.

Our service is FCA regulated and we never charge a fee for our quotes.

Can I still buy income protection?

Yes - you can still take out a new income protection policy during the Coronavirus pandemic.

The process is still the same, with the addition of some new questions relating to Coronavirus during the application process.

These questions can include:

  • Have you had any Coronavirus symptoms within the last 30 days?
    (A new and continuous cough, high temperature or fever, loss of taste or appetite, difficulty breathing)
  • Have you been advised to self-isolate within the last 30 days?
  • Have you tested positive for Coronavirus?
  • Have you had to be treated in hospital for Coronavirus?

Answering yes to any of these questions won’t prevent you from taking out cover, so don’t be worried about being honest.

Instead, it’s likely you’ll have your application postponed until you’ve made a full recovery, or you may have your application passed on for manual underwriting.

Why not get in touch with a friendly member of our team, we can help you through the whole application process and answer any questions you may have about taking out income protection during the Coronavirus pandemic.

Can I take out income protection if I have tested positive for Coronavirus?

Yes - if you’ve had Coronavirus in the past, or have recently tested positive, you can still secure an income protection policy.

Many believe that testing positive for Coronavirus will prevent them from securing financial protection, but this isn’t true.

If you’ve tested positive for or had Coronavirus within 30 days prior to your application, your application may be postponed until you make a full recovery or until you get a negative test result.

Having your application postponed due to Coronavirus won’t impact your ability to take out any other life insurance products in the future, so don’t worry about disclosing your positive test.

If you’ve previously had Coronavirus and it’s been longer than 30 days since you tested positive, you should be able to take out cover without your application being postponed.

Depending on the provider and the severity of your coronavirus symptoms, your application may need to go through manual underwriting.

Does income protection cover Coronavirus?

Yes - those with existing policies are likely to be able to claim for Coronavirus.

It’s important to bear in mind that income protection policies have a deferred period, which is the length of time you have to be unable to work before the cover will pay out.

Most people who test positive for Coronavirus will only experience symptoms for a week or two, meaning that if the policy deferred period is greater than two weeks, it’s unlikely that you’d be able to claim.

However, if you become seriously ill with Coronavirus and it appears that you’ll be unable to work for longer than your deferred period, then you should be able to make a claim.

Your payments will then commence after your deferred period has passed.

Will a new income protection policy cover coronavirus?

Whether a new policy will cover Coronavirus will vary amongst insurers.

Most providers will include Coronavirus as an exclusion on new policies taken out following the start of the pandemic.

Having Coronavirus as an exclusion means that you won’t be able to make a claim if you become too ill to work due to COVID-19.

However, as the UK starts to ease restrictions and as infection rates start to fall, some providers are taking a different stance.

Some insurers are now providing cover with no Coronavirus exclusions.

This highlights the importance of comparing quotes, as no two providers have the same underwriting process.

Why not let Reassured Advice save you time and money by comparing quotes from the UK’s leading providers, and smaller specialist companies, on your behalf?

Will I need to take a Coronavirus test?

It’s not required for you to take a Coronavirus test while applying for income protection.

However, as you’ll be asked questions regarding Coronavirus during the application process, you may want to take a test beforehand to make sure you’re giving the most accurate information.

If it’s found that you had Coronavirus at the point of application, but you answered no, this could have serious implications for your policy and it may be deemed as void.

Will income protection pay out if I can’t work due to Coronavirus?

Yes - it’s possible to make a claim and receive a pay out if you fall ill with Coronavirus.

However, it depends on any policy exclusions and whether you are unable to work for a period in excess of the policy deferred period.

If you become seriously ill with Coronavirus, and it’s likely you’ll be off work for an extended period of time, you should be able to make a successful claim.

For policies that were taken out before the pandemic, a claim can be made as per the terms and conditions of your policy.

For policies that were taken out during the pandemic, you may need to check the terms and conditions of your policy to see if it contains any Coronavirus exclusions.

Protect your income by comparing quotes through Reassured Advice. Our income protection insurance starts from just 50p-a-day.

Will I be covered if I can’t work due to self-isolation?

No - if you’re unable to go to work due to needing to self-isolate, it’s unlikely you’ll be able to make a claim on your income protection policy.

This is because self-isolation doesn’t meet the definition of incapacity listed within your policy.

Incapacity refers to the inability to do something, in the case of income protection this refers to the inability to work due to accident or sickness.

If you’re isolating and are asymptomatic, this won’t make you too ill to work and therefore a claim won’t be successful.

If you develop symptoms and ultimately test positive for Coronavirus during your isolation period and become too ill to work as a result, then you may be able to make a claim.

This will only be possible for those with existing policies (e.g. those that were taken out before the pandemic and before any exclusions and restrictions were introduced) or newer policies that don’t contain Coronavirus exclusions.

Am I covered for redundancy due to Coronavirus?

If you have an existing income protection policy it’s unlikely that you’ll be able to make a claim on your policy for unemployment.

Most standard income protection policies don’t include unemployment cover.

However, this may be possible on existing short-term financial protection policies such as Accident, Sickness and Unemployment (ASU).

But you’ll need to check with your provider if you’re covered for unemployment due to Coronavirus.

How will Coronavirus affect my unemployment cover?

Due to the current situation, many providers have ceased offering any unemployment cover to new applicants.

If you’ve been made redundant or lost your job due to the pandemic, there are government schemes available to help you financially. You can find a list of these at the bottom of this article.

If you have an existing policy (that includes unemployment cover), and you’re made redundant, you should be able to make a claim as per the terms and conditions of your policy.

Can I make a claim if I’ve been furloughed?

Whether you can claim while on furlough is down to the discretion of the insurer.

Different insurers are taking different approaches, so it’s important to seek the advice of your specific insurer if you're looking to make a claim while on furlough.

It’s likely that many won’t accept claims from those on furlough as furloughed workers are not carrying out their daily duties and, therefore, won’t be prevented from working if they were to become ill or injured.

Will having the COVID vaccine affect my policy?

No - at the moment your vaccine status isn’t likely to have an effect on your policy and ability to secure cover.

Any claims made will be assessed under the terms and conditions outlined in your policy.

What if I choose not to have the vaccine?

While it’s recommended to have a vaccination against Coronavirus, it’s currently not compulsory.

Therefore, not having the vaccine shouldn’t influence your ability to claim on an existing policy or your ability to take out any new policies.

I have an existing income protection policy - can I make a claim?

Yes - Coronavirus is unlikely to affect existing policies, taken out before the pandemic.

In the event that you become too ill or injured to work, you should be able to make a claim as per the terms and conditions listed within your policy.

Do I need income protection?

Whether or not you need income protection insurance will ultimately depend on your own personal needs and circumstances.

If you benefit from full sick pay from an employer and/or have your own personal savings to fall back on, you may not require this form of financial protection.

However, if you:

  • Are self-employed
  • Don’t receive full sick pay
  • Don’t have personal savings

You may benefit from having income protection in place.

Income protection can act as a form of sick pay for self-employed workers who won’t benefit from sick pay from an employer.

This can be extremely beneficial in helping to cover financial commitments when money might be tight.

Read our comprehensive guide on income protection for self-employed workers for more information »

Similarly, those with no savings might fall on hard times if they were unable to work so income protection can be a vital financial support.

Speaking to an expert, like Reassured Advice, can help you identify whether income protection insurance is the right choice for you.

We can take into consideration your personal circumstances to find you the best solution.

Simply get in touch.

Coronavirus government help

For those struggling financially during the Coronavirus pandemic, the government introduced a range of schemes to help those who have fallen on hard times.

  • Coronavirus job retention scheme - This is a scheme to help employers who have had to close due to the Coronavirus pandemic. Employers in this scheme can access support to help pay staff throughout the pandemic. All business are eligible for this so if you’ve lost your job it may be beneficially to speak to your employer
  • Furlough - If your employer can’t afford to pay you during the pandemic, they can claim up to 80% of your wage from the government
  • State benefits - If you’re out of work or part of a low-income household you may be able to access universal credit

Compare income protection insurance quotes

Thankfully the Coronavirus pandemic won’t prevent you from securing a new income protection policy.

Comparing income protection quotes is the best way to find the right policy at the best price.

Not only can we compare quotes on your behalf, but we can help you through the whole application process and answer any questions you might have.

Our income protection starts at just 50p-a-day and we have a range of policies to suit every need.

Give yourself peace of mind and protect your income through Reassured Advice.

Get in touch for your fee-free, no-obligation quotes.

Sources:

[1] https://www.theguardian.com/money/2021/feb/11/covid-fuels-huge-rise-in-britons-at-financial-risk-warns-regulator

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