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Have you prepared for the unexpected? How COVID-19 has impacted Life Insurance



Welcome


Welcome to our 'Guide to Lifestyle Protection'. During the Coronavirus (COVID-19) pandemic crisis and the unprecedented demands on our health system, our lives have been

disrupted in ways that we've never experience before.


The immediate and direct impact of COVID-19 in the United Kingdom has resulted in tens of thousands being lost. Just as hand washing and mask wearing are key to protecting our family, personal insurance protection providers some reassurance that your family's lifestyle is protected if you die prematurely become ill, or are injured.


As the coronavirus pandemic continues, many of us understandably have anxieties over our futures. If there was a major injury, accident or illness, the impact on your family would be immense, causing significant amount of pressure and financial stress, especially if the main income earner is in question.


COVID-19 has caused many Britons to think about the impact an illness or death would have on their families and in turn consider the value in having personal insurance.


Being prepared for the unexpected will protect you and your family from sudden and long-term financial hardship.


It goes without saying that we need to enjoy our lifestyle today but at the same time ensure it remains there for us and our family tomorrow.


Wellbeing Indicators


COVID-19 pandemic shows adults are pessimistic about future improvements


Adults expect their financial wellbeing to worsen throughout the course of 2021, whereas there is some optimism of improvements to other wellbeing indicators, such as mental, social, and physical wellbeing, once the vaccination is successfully rolled out.


Research tracking attitudes throughout the coronavirus (COVID-19) pandemic shows that adults are pessimistic about improvements to their financial wellbeing to worsen. The vast majority of adults (84%) also remain concerned about the future of the economy as a whole [1].


Financial wellbeing is a key aspect of our overall wellbeing and affects our ability to respond to financial unpredictability, meet financial goals and make choices that allow us to enjoy life.

Other wellbeing indicators show that 19% expect a worsening in social wellbeing, 18% expect a worsening in mental wellbeing and 17% expect a worsening in their physical wellbeing. However, there is optimism for improvements in these three measures with the continued roll-out of the vaccination programme.


The pandemic has left to a worrying divide between the financial ‘haves’ and ‘have nots’ in people’s ability to manage their money – and this is set to get worse. Some have been able to save more as expenditure has reduced, but many others have seen a reduction in income over the last year placing extreme strain on their finances.


Concerns remain over the impact of the pandemic on financial wellbeing, particularly over the longer term. As we hopefully emerge from the worst of the health crisis, there are reasons to be optimistic for improvements in some aspects of wellbeing, but financial wellbeing improvements are expected to lag behind and could have lasting consequences on people’s financial plans and resilience.


The pandemic has driven financial advice for income protection and critical illness up by a third [2]. Other findings suggest the COVID-19 pandemic has driven demand for expert professional financial advice, with a sharp focus on protection and mortgages.


The demand for protection is being brought into focus, with people wanting to put financial safety nets in place for themselves and their families amidst health concerns and economic uncertainty. With many people anxious about their finances as they face job losses or cuts to household income, concerns about their own health and that of family members are also driving an increased awareness and need for protection. Source data [1] Aegon – figure correct, January 2021 [2] Online Survey (15 October – 22 December 2020), 94 respondents


Life Insurance

COVID-19: What you need to know The coronavirus (COVID-19) pandemic has led to concerns and questions about how best to protect our loved ones in times like this. If you or a loved one has to make a claim on a life insurance policy as a result of the coronavirus pandemic, it would be handled like any other life insurance claim and be paid subject to the usual policy terms and conditions. Can I still buy life insurance? Many insurers are still accepting life insurance applications, and some have now included a coronavirus-related question. There are insurers delaying applications if you are currently testing positive for coronavirus and need to provide medical evidence, but this does not mean you cannot apply again in the future. What questions should I expect to be asked on coronavirus when applying for life insurance? Life insurance companies have developed specific questions to assess the risk around coronavirus for new applications. This is simply to make sure that they have the full picture when they assess your health and medical circumstances. Coronavirus questions may include: - Have you tested positive for coronavirus? - Are you currently in self-isolation? - Have you had any symptoms of coronavirus? - Have you been in direct contact with anyone who has been diagnosed or suspected of having coronavirus? If you answer ‘yes’ to some of these questions, your decision may be delayed until you have recovered. The decisions may vary between insurers. If you’re classed as being high-risk because of your medical condition, for example, if you have severe diabetes, asthma, a heart condition, an auto-immune disease, or a number of other conditions, then you won’t be classed as ‘self-isolating’ unless you’ve got symptoms.


People who are being advised to stay at home to keep themselves safe will just be classed as a standard low-risk individual. What happens if I miss a payment? Does my life policy become null and void? Life insurance policies typically have a period of grace after a non-payment of premiums before any lapse. However, each insurer will have a different rule and you should contact your insurer as soon as possible if you miss a payment. The reason for a missed payment could also have an impact on how it is treated by an insurer, for example, if you are seriously ill or experiencing financial difficulty. If you cant make a payment and plan to cancel your direct debit, speak to your professional financial advisor to discuss your options. Will some companies accept a payment holiday and if so, under what conditions? If you are experiencing financial difficulty, you should contact your insurer or professional financial advisor as soon as possible to discuss your options, such as payment deferrals or holidays. Circumstances in which a payment holiday is accepted, according to the terms and conditions of a policy, will be down to individual insurers.

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