I’ve decided to go self-employed this year as a management consultant so left my old company as of the end of January.  The pay package I had before included life insurance so I will need to get some kind of cover in place to protect my family if anything should happen to me.  I did have COVID during December and early January but am well now.  Will COVID affect my application for a life policy?

Carl replies

Life insurance companies are still accepting applications and providing quotations for life cover during the pandemic.  However, they are asking questions relating to the virus as part of the application process and it is possible that if you have had COVID-19 recently they may defer your application until they you consider that you have fully recovered.  If you didn’t suffer severe symptoms and were not hospitalised, the delay may be a month or so, but if you were more seriously affected it could be longer.

The premiums for your cover will depend on a number of factors including if you have any pre-existing or long-term health problems such as diabetes or asthma, which may be indications of vulnerability to feeling the impact of the virus for a longer time.

As you are now self-employed, you might like to consider other types of insurance to protect your family if you were to fall ill or be injured and therefore unable to work.

Income protection policies pay out a monthly sum during your period of illness or incapacity.  They can be set to kick in after a defined “waiting period” and can either be for a fixed maximum period such as one or two years or can provide income to a pre-arranged age:  premiums will reflect the level and agreed time period involved.  New policies don’t normally preclude viruses such as COVID-19 so if you were to fall ill with something similar in the future, you may be covered.  Cover under this type of policy is usually linked to income so you may find that you need to wait to establish proof of earnings before taking out a policy.

Critical illness cover provides a lump sum in the event of you falling ill with one of a specific list of illnesses and conditions, defined in the policy.  Critical illness policies are unlikely to cover serious virus epidemics.  The payment can be used to pay immediate liabilities such as the mortgage and ongoing bills.

Protection is a key part of any financial plan.  Becoming self-employed is a major change in your life so I recommend that you talk your financial situation through with a Chartered Financial Planner to make sure that you have the protection you need now and have made plans for your future financial security.

This is a marketing communication:  any opinions expressed in this article do not constitute advice.