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COVID-19 and income protection insurance

LifeSearch author Katie Crook-Davies
5 min read

by Katie Crook-Davies, Protection Writer

See author bio

Katie works with insurers and distributors to make protection propositions more accessible, pricing more transparent and marketing messages more simple.See author bio

Guide last reviewed 16 Dec 2022

The pandemic left us in lockdown for months and has many of us worrying about our health and finances, possibly more than we have ever done before. Our research showed that more than half of us experienced some impact to our personal finances due to coronavirus, which also explains the increased demand for financial products such as income protection insurance. You may be wondering whether your existing income protection policy would pay out for COVID-19, or whether you can buy a policy during this time? We answer these questions, and more, in this guide.

Will my income protection insurance policy pay out for coronavirus?

If you have existing income protection cover in place, the good news is that your policy should cover coronavirus. Income protection insurance pays out if you’re ill or have had an accident and can’t work, therefore if coronavirus means that you’re unable to work, you may be able to claim.

The important thing to know is that all income protection policies come with a deferred, or waiting period. This is the period of time between when you fall ill and when you start receiving your monthly insurance payments. Most policies have a deferred period of at least one month, so in this case, you’d need to be ill and off work for at least one month to receive any insurance benefits.

The majority of people fortunately make a full recovery from COVID-19 within a couple of weeks, so would never actually receive a payout from an income protection policy. However, should the worst happen, and the virus has a longer term impact, your income protection policy should step in to support you financially.

You can take a look at your policy wording to check what deferred period your income protection policy has. If you're unsure of anything or have questions regarding your policy, you can always give our friendly team of financial advisers a call on 0800 316 7253.

Will my income protection insurance policy pay out if I’ve been made redundant?

Income protection insurance only pays out if poor health means that you can’t work, and for this reason, these policies won’t pay out if you’ve been made redundant. You may have an existing accident, sickness and unemployment policy that could help here, alternatively, check out the latest Government support measures.

If you have an existing income protection policy and fall ill, after being made redundant, your policy should be able to provide you with some financial support. It’s best to get in touch with your insurer directly if you have questions on this and how your policy works. 

Can I still claim on my income protection policy if I’ve been furloughed?

In short, yes! But definitely worth checking your specific insurance policy wording here, or contacting your insurer directly, because insurers are taking different approaches.

I’m worried about coronavirus, can my insurer help?

Like many industries, the life insurance industry has really stepped up to make sure that all of their customers receive the support they need. Beyond the financial protection provided by your income protection policy, did you know that you may also have access to a range of additional free health and wellbeing services? Many insurers now provide access to 24/7 virtual GPs, prescription deliveries, counselling and other mental health support and bereavement services. We’ve produced a useful summary of the support offered by each insurer, which you can find here. 

But if you just need to chat to someone, LifeSearch is always here for you, so please don’t hesitate to give one of the team a call on 0800 316 7253. We're here Monday – Friday 8am – 8pm, Saturdays from 9am – 2pm and Sundays 10am - 3:30pm, and would love to help.

It’s also worth being aware that many insurers are allowing any customers facing financial difficulties during this time, to pause or reduce their insurance premiums. This is to help reduce any financial stress at an already stressful time and ensure that customers stay protected.

Can I buy income protection insurance now?

Since the onset of the coronavirus pandemic there has been a surge in demand for income protection insurance, as people are thinking more about their health, work and finances. And while it’s still possible to buy cover, many insurers have adjusted their application processes and introduced new questions around COVID-19. 

Insurers will want to know if you have the virus or are experiencing symptoms of it. They may also want to know if you’ve recently been in contact with someone who has the virus or have been advised to self-isolate. They’re simply trying to get a full picture of your health so that they can better understand your risk of falling ill.    

If you have coronavirus at the time when you apply for your income protection insurance policy, or are suspected to, it’s likely that the insurer will want to wait until you’ve made a full recovery before they cover you. 

As ever, it’s important to be completely open and honest when you apply for an income protection policy and answer all of the health questions truthfully. Insurers can refuse to pay claims if they find out that applicants weren’t honest, potentially leaving your family unprotected at a time of need.

Some insurers have also adjusted how their new income protection insurance policies cover coronavirus. At LifeSearch, we work with the UK’s top insurers and would be happy to explain what these changes mean for you. Give us a call on 0800 316 7253 to chat with one of our expert advisers. 

If you want to know more about income protection insurance – how cover works and how much it costs, you can take a read of our simple two-minute guide

I want to know more…

We’re here to help. Call us on 0800 316 7253 or request a callback from one of our expert advisers who will happily answer any questions you have. We look forward to chatting with you soon.

LifeSearch author Katie Crook-Davies
Katie Crook-Davies Protection Writer
Katie is an independent insurance consultant who is passionate about protection and wants to share that passion with others through engaging marketing content. She hopes that one day people will get as excited about protecting themselves and their loved ones, as she does!
See all articles by Katie Crook-Davies
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