In these uncertain times, having an insurance adviser like us can help you navigate the insurance market for a new policy or an upgrade to an existing one.
Here are a few things to think about if you’re planning to take out new personal insurance at the moment.
Normal underwriting may not be able to happen
While Insurance providers are deemed as essential services, it may be challenging for them to get as clear a picture of the risks they’re taking on with the proposed new policy. While a high body mass index (BMI), for example, might normally have meant the provider would send you for a further health check before approving your application, for now you may just find that there’s a loading or exclusion added to your policy.
While insurance providers can’t do all the normal investigation they would to understand new applications, they’re likely to be cautious and the cover you can get will be more limited.
You can’t protect against what’s already happened
Insurance is designed to offer you support for circumstances that you couldn’t have seen coming. If a risk is well-known (like in this case, COVID-19), your new insurance policy is likely to have exclusions and limitations.
Insurance providers are implementing stand-down periods and other restrictions on what they will pay out for COVID-19 cases in new clients. As for existing policyholders, policies that were taken out before the outbreak don’t have exclusions for pandemic-related claims, so they are likely to respond in the normal way.
For extra peace of mind, please don’t hesitate to contact us: we can help your review your existing insurance plans and assess any gaps that you may want to fill.
Understand what you’re buying
In this uncertain time, you may have thought about protecting your family’s financial life from the job loss. Many New Zealanders have been enquiring about income protection, but there seems to be some confusion in the market about how this powerful tool actually works.
Besides what we said before about known risks and policy exclusions, income protection insurance is designed to step in when you’re off work due to illness or injury. In other words, it doesn’t cover for job losses due to redundancy or business interruption.
If you have redundancy cover in place, perhaps as an add-on to an existing income protection policy, please contact us: we can help you understand if you’re eligible for an insurance payout. If you don’t have this add-on in place, keep in mind that some providers have put a temporary halt on the sale of new redundancy cover at the moment. Plus, most redundancy cover policies include a clause that says people need to not have been aware of the threat of losing their job when they took the insurance out, which would make new cover difficult to claim on at the moment, anyway.
Be careful with replacing cover
If you already have an insurance policy in place, it’s important to take extra care with replacing it (or cancelling it) for now.
Insurance providers have introduced more exclusions on new policies – including things like mental health exclusions on disability benefits and restrictions on claims made when someone is out of work, as well as specific COVID-19 exclusions.
Once again, get in contact with us: it’s more important than ever to understand what you’re giving up if you cancel an existing policy in favour of another.
If you have concerns about insurance affordability at the moment, please give us a call. Many insurance providers are working hard to help customers that find themselves unable to pay their premiums for a while, including offering premium holidays for a set period.
However, these support options may be more generous for existing customers than those who take out cover through this period of disruption.
Things change fast: we’re here to help
Things are changing fast, at the moment. Like to understand what you’re covered for? Please get in contact with us as soon as possible. If you already have policies in place, we can talk about how they would respond to a COVID-19 claim. If you’d like to take out new policies, we can help you work out how best to get cover during this period of uncertainty.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.