Will the costs of protection insurance increase due to the Corona virus?

I have a life and serious illness cap but I’ve heard these could be affected by the pandemic.

I’m also concerned that my cover providers will include exceptions to my policies, especially now that there’s been an uptick in Covid-19 cases again and yet another lockdown.

I am also worried that I will have to pay more. Will my protection insurance premiums go up due to COVID?

Angelique Rusica of This Are the Money replies: Protective policies exist as a safety net in case the worst should happen.

They provide protection in the event you become ill or die and still have financial obligations such as a mortgage to pay off and have dependents.

With the increasing news of Covid-19 cases and with all the uncertainty, it’s understandable that you’re worried about having to pay more. But it all really depends on whether or not you’ve agreed to a guaranteed price.

If you switch, you may end up getting a great deal at first, but your provider may raise your premiums at a later stage and you could be worse than before.

If you switch, you may also end up paying more if you have an underlying health condition like diabetes or if you have a high BMI reading.

There may not be any better deals out there. Some small income protection insurers, for example, have applied exclusions to new businesses.

There are also reports that underwriting may be more severe in some zip codes, potentially related to life expectancy and Covid-19 case numbers.

However, you don’t say where you’re from, so we can’t say if this will affect you.

There are a lot of things to consider before switching – it’s wise to speak to a financial advisor before making any rash decisions.

Ben Burgess, Senior Protection Consultant at LifeSearch, answers: Since March, many policyholders may have been understandably concerned about the impact of the virus on their insurance premiums.

While Covid-19 has certainly had an impact on the protection industry, it has not yet been as severe as most would imagine.

You don’t have to worry about price hikes or Covid-19 exclusions, as you don’t have to worry about price hikes or Covid-19 exclusions, as policyholders who took pre-pandemic insurance cover at guaranteed rates before the pandemic are not affected, as existing policies are not affected.

This is because insurance companies cannot change the price of existing policies as premiums are fixed.

However, if the policy is based on reviewable rates, where premiums can change in certain situations, there may be changes in the future, if not already.

Reviewed rates are cheaper initially than guaranteed rates but may increase over time.

With Covid-19 increasing the amount of life, critical illness coverage, and income protection claims expected to be paid out by insurance companies, individuals with reviewable rates may see their monthly premiums increase.

What about individuals who want to take a cover for the first time or who are looking to modify their existing cover?

The advice is to weigh what you can afford now with the coverage you need in the medium to long term.

With tough economic times ahead, a smaller amount of coverage with a fixed premium would provide more certainty.

It would also be wiser to put policy in place now rather than wait until the pandemic is over, if it does, especially as it appears we are now entering a second wave.

This is because we have yet to see significant price increases and even though virus life insurance and other protection coverage are still widely available.

There are two main points to keep in mind:

1. Hold on to your current wrap if you can.

If you’ve taken a financial hit due to Covid-19 and now feel your premiums are too high, it’s worth exploring other options such as career breaks, premium holidays, or lower payment options.

Your insurance company and advisor will work with you to modify your existing coverage to make it more affordable. Canceling your coverage should be a last resort.

2. If you are setting up a cover for the first time or adding a new cover to your existing documents it is often best to do so on guaranteed prices.

Don’t delay hoping things will return to normal soon.

We don’t know how long the pandemic will last, what the long-term impact it will have on both physical and mental health or how much premiums will increase for it.