Insurance – What Do You Need to Know During the Circuit Breaker and COVID-19 Period?
As we grapple with the adjustments in our everyday routines amid the COVID-19 pandemic, the thought and topic of insurance inevitably pops up every now and then.
“What can I claim should I be diagnosed with Covid-19?”
“Can I still approach my adviser during this time?”
“Can I still apply for insurance now?”
“Is insurance more expensive during this period of time?”
“How will Covid-19 affect my insurance application?”
These are some of the questions that I have been receiving from online enquiries and clients. Through them, I have learnt that some people are unsure about insurance services during this period. Furthermore, there are indeed new requirements for insurance application due to Covid-19 and this has added on to the sense of uncertainty.
Yet, the nature of insurance both in concept and in implementation is to create certainty and security during periods like this. Thus, I hope this article – consisting of questions people have asked me and questions I think people might be asking – will bring you clarity and perhaps a greater peace of mind. If you have queries that are not answered in this article, do not hesitate to send me a message at firstname.lastname@example.org.
Insurance Questions During Covid-19
Here are some questions (with answers of course) about life insurance that you might be asking:
1. My insurance adviser’s office is closed. Can I still apply life insurance?
Yes. You can still apply for life insurance. Insurance services (for example claims servicing, policy renewal and servicing, policy inception, insurance broking and financial advisory) are still classified as essential services that can continue operations during this extended circuit breaker period. However, there shall be no in person face-to-face provision of insurance services during the circuit breaker period. Your adviser can apply for life insurance via online virtual channels.
2. Will COVID-19 affect my application of life insurance?
Most insurers have revised these underwriting requirements for applications due to the current developments. Some companies have taken steps for the insured to complete additional forms to attest that they do not have history of COVID-19. Applications might be deferred if the insured is currently having fever, flu or respiratory symptoms.
Here is an example of the additional questions you might need to answer:
- Have you had travel history in the past 14 days and/or intention to travel in the future in the next 30 days?
- Have you recovered from Covid-19?
- Have you had close contact with someone who has been quarantined or was diagnosed with Covid-19?
- Do you have history of being quarantined or had tested for Covid-19 with negative result (not diagnosed with Covid-19)?
3. Are the life insurance premiums more expensive during this period of time?
There are no additional premiums due to the recent outbreak of Covid-19. However, your life insurance applications might be postponed if you answer positively to the above questions.
4. Will I need to go for medical examinations for applications of life insurance?
Most likely, no. This is because medical examinations for insurance applications are deemed as non-essential services under the circuit breaker measures. Also, most insurers set a limit on the coverage amount that you can apply for. For example, if you are 50 years old or younger, you can apply up to S$3 million of life insurance with some insurers without the need for medical examinations – provided that you do not have any pre-existing medical conditions of course!
5. Are there any subsidies or relief for my current insurance premiums as part of the financial support measures from Budget 2020?
There are no direct relief or subsidies for your insurance premiums. However, it was announced at the Resilience budget that the Monetary Authority of Singapore (MAS) will work with insurers to help individuals who are facing cash flow challenges with their insurance premiums.
Subsequently, there are support measures introduced by insurers which brings me to the next question.
6. Can I stop my insurance premiums if I have lost my job?
Monetary Authority of Singapore (MAS) has announced that Life insurance policyholders are allowed to defer their insurance premiums for up to six months while maintaining insurance coverage.
If you have lost your job due to COVID-19, you may apply for premium deferments. This is not automatic and the policyholders need to apply with their life insurers. However, do note that payments will need to be made at the end of the deferment period. The good news is that insurers will not charge interest for the deferment of premiums.
7. What are some of the criteria to qualify for premium deferment?
Here are some examples of the criteria used by insurers to determine the qualification for premium deferment (the list is not exhaustive):
- Forced no-pay leave
- Loss of income
- Hospitalisation due to COVID-19
The criteria used may differ insurer from insurer so you will have to refer back to the company you are insured for the exact and detailed qualifying criteria.
8. Is premium deferment the same as a premium holiday?
No, a premium deferment is not the same as a premium holiday. Premium holiday is usually a feature in investment-linked insurance policies to allow the policyholder to temporarily suspend paying the premiums. The main difference is that you will not need to pay back the “suspended premiums” when you resume the premium payment using a “Premium Holiday” while for premium deferment, you will need to pay the premiums that were deferred.
9. Does my critical illness insurance policy cover Covid-19, which is a new disease?
Covid-19 is not defined as one of the 37 critical illness defined under the Life Insurance Association critical illness framework which standardises the critical illness definitions offered by insurers. However, many insurers have extended additional coverage at no cost for their existing policyholders to cover Covid-19.
Here is a example of a list of insurers (not exhaustive) that has this additional coverage:
- NTUC Income
- Tokio Marine
- China Taiping
- HSBC Life
The coverage typically includes cash pay-out for Covid-19 diagnosis, stay-home notice, cash benefit for hospitalisation…etc
10. How about my personal accident policy? Does it cover infectious diseases like Covid-19?
Certain personal accident policies do extend to cover infectious diseases such as Severe Acute Respiratory Syndrome (SARS), Dengue Fever, Zika etc. Not all will extend to cover the current pandemic Covid-19. For example, the personal accident policy with infectious diseases cover from NTUC Income has extended COVID-19 coverage. The coverage includes a daily payout of $100 (up to 30 days) and death benefit of $10,000 due to death resulting from Covid-19.
11. I am covered with my company’s insurance. Does it cover Covid-19?
Most of the insurers do not exclude claims arising from Covid-19 for Group Medical plans. Some insurers have specifically extended their corporate coverage to include COVID-19 during this period. However, as this is not a standard practice across the industry, it will be best for check with your company’s insurance provider for details such as policy terms, conditions and exclusions. Another point to note is that the government will cover the hospitalization bills for Covid-19 infected Singaporeans and PRs in Government hospitals.
12. I read about some changes on my Integrated Shield Plans (IPs) during this period. What do I need to take note?
MOH has announced that we cannot make a claim against our IPs if we had travelled from 27th March 2020 and be hospitalised for Covid-19.
Review Your Insurance – Look out for “New Needs”
Our insurance plans do not automatically reorganize themselves to cover these new risks that we are facing. A few years ago, I wrote an article “Have your insurance coverage moved with the times” and during that time, the new development in insurance is the addition of early stage definitions into critical illness insurance definitions. Today, these definitions are offered by almost all insurers.
Last year (2019), NTUC Income added in coverage for unknown infectious disease to their critical illness coverage definitions such that a claim can be made if there is a stay of 5 days or more in the Intensive Care Unit (ICU) during a hospitalisation due to an infectious disease such as COVID-19. Today, this type coverage is most necessary against the backdrop of the current global pandemic.
When it comes to insurance planning, having enough coverage and the right type of coverage are equally important. You can be insured for a big amount (e.g. $10 million dollars) but if the illness is not covered by your insurance, you will not be able to claim. On the other hand, you can have the best type of coverage (e.g. a policy that covers all illnesses) but if your sum assured is not enough (e.g. $100), you will still not be financially protected.
Unfortunately, insurance is oftentimes a complex topic. Fortunately, this period may well offer the best opportunity to do a proper review to have your insurance updated and financials protected.