In this article we’ll be discussing the measures that can assist life and income protection insurance policy holders during the COVID-19 crisis.
First things first, are you covered?
If you have existing life and income protection insurance in place through an adviser (retail advised policies), you are covered under the terms of your policy if you become ill with COVID-19 and cannot work, or you pass away because of COVID-19.
If you do not have your life and income protection in place through an adviser (e.g. you have your policies with a direct insurer, through a group plan or automatically through super), it isimportant to check your policy wordings for any pandemic exclusions. Pandemic exclusions are not the norm, but it is important to check your policies exclusions if you have arranged your insurance without the help of an adviser.
Are life insurers offering premium relief?
Due to the significant impacts of COVID-19 on the whole economy, life insurers are not able to provide a blanket premium waiver to all policy holders, because if they did, they would go out of business and would not be able to pay claims.
Each life insurers approach to premium relief is different and premium relief is being assessed on a case by case basis, so it is important to speak to your adviser about what options are available through your insurer.
Some of the premium relief options available with most life insurers are:
- Premium Holiday: This option allows you to put your policy on hold for up to 12 months. Be careful with premium holidays as they often mean you are not covered whilst your policy is on hold.
- Decreasing Cover Temporarily: This option allows you to decrease your cover temporarily, then once the COVID-19 pandemic has passed, you can increase your cover back to its original level without requiring a medical.
- Restructure Cover and Pay Premiums from Super: This option allows you to restructure some of your policies and have your super pay for the premiums, so you can maintain the essential cover for you, your family and/or your business, until your cash flow recovers.
- Restructure Payment Frequencies: You can change any annual, half yearly or quarterly payments to monthly payments, to help with cash flow.
- Defer Payments: This option allows you to defer premiums for 2 months whilst still maintaining cover, with the option to make up those premiums via a payment plan.
If you would like to speak to the Business Funding and Planning life insurance specialists about what options are available through your particular life insurer, please let your account manager know and we will be happy to assist.
Also, if you do not have life insurance or income protection in place, but you would like to take out a policy, you are still able to apply for new policies through our life insurance specialists.
Special thanks to Brett Wright from Business Funding and Planning for this guest blog.
Brett Wright Contact Information
(02) 9528 9888
brett@businessfp.com.au
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