If you’ve already read my article, Coronavirus….Will Your Life Insurance Pay Out For This?’ chances are that you are already starting to look at ways to protect your family in light of the recent concerns about the outbreak of COVID-19… but what about protecting your income? In this article I’m going to be talking about those who haven’t taken out Income Protection yet, but are planning to, including the options for day one Income Protection and those who already have an Income Protection policy, and whether it will pay out if you are affected by the illness.
**edit** Since we blogged this, one insurance company as of last Friday at midnight excluded Coronaviruses from their day one Income Protection Insurance – there are still a few insurance companies who haven’t! Please read to the bottom for more info *edit**
With confirmed cases on the rise and talk of the UK following the likes of Italy and imposing mandatory lockdown of certain areas it is only natural that the general public are starting to think about more than whether or not they have enough loo roll…what would happen if you caught the virus? Even a mild case would mean having time off work and therefore losing earnings.
Currently the government-recommended self-isolation period for the condition is 14 days, and if you qualify for statutory sick pay (SSP) you’re talking about receiving a paltry £94.22 a week – not nearly enough to support yourself and your family until you are able to get back to work. And what would you do if you are self-employed, and not entitled to anything?
Income Protection Insurance is a hugely useful insurance to have, whether there’s an impending epidemic about to sweep the country or not, it pays out a monthly lump sum if you are unable to work due to illness, injury or involuntary redundancy.
So, let’s say you already have a policy in place (you sensible person), would it pay out if you were to contract the virus and be unable to work?
Your Current Policy
Once your insurance company is satisfied, you’ll start receiving your monthly payments until you are well enough to return to work, or until your payment period is up.
There are currently no exclusions for pandemics on most Income Protection policies, so claiming in the event that you were unable to work due to Coronavirus should be as straightforward as it would be with any other covered illness.
And What About If I Don’t Have A Policy?
Take one out. Seriously!
As long as you don’t have the virus when you apply for the policy it’s likely that most life insurance will cover the Coronavirus going forwards. We’ve all been following the news, and there are more and more stories every day about people who have had to self-isolate, or who are being sent home from work, so it makes good sense to get some sort of Income Protection in place now as a precaution.
It will a little – but only in terms of the types of questions you might be asked. Some insurance companies are changing their terms for new customers and asking if they have lived in or travelled to any of the affected countries (such as China, Japan, and northern Italy), within the last month, and might even include some additional health screenings or postpone the application for a set time period if that is the case.
And If I’m Self-Employed?
Again, any existing policy you have will cover you in the event that you contract the virus; and any new policy should be fairly straightforward as long as it’s taken out before you are ill.
With Income Protection for the self-employed there will always be a waiting period of at least 1 day before you can start receiving payments, and the longer the waiting period the lower the premiums.
And so there it is. At the moment it’s safe to say that we have no idea what the outcome will be with Coronavirus, or how many people will be affected and to what degree, but what is 100% guaranteed, if you contract it, you will be out of work, so I would certainly urge that if you don’t already have Income Protection in place then at the very least give us a call and talk through your options – it’s probably cheaper than you think, and it’ll be one less thing to worry about when you’re down to your last loo roll and the kids have had CBeebies on a loop for the past 14 days…
If you don’t know what Income Protection is, scroll right down to the bottom of this article, we have some links to blogs we have written on ‘What is Income Protection?’ and ‘How much does Income Protection cost?’.