The Coronavirus and Your Life Insurance

In December 2019, the Chinese authorities detected the outbreak of the Coronavirus, which causes the disease Covid-19. The World Health Organization (WHO) declared the disease a pandemic on 11 March 2020, as the illness reached over 110 countries and territories across the globe.

Many Australians are concerned whether their life insurance will pay out should they pass away due to contracting the Coronavirus.

If you have an inforce Retail life insurance policy and adhere to all the terms and conditions set out in your PDS, there is typically no exclusions on claims resulting from the Coronavirus.

Will life insurance payout for the Coronavirus? Generally, there are no exclusions for pandemics on a standard Retail life insurance policy that’s already in place. Your loved ones will be eligible to receive your death benefit if you pass away from a pandemic illness, like Covid-19, if you have fulfilled your disclosure obligations and meet the terms of your cover. However, select group insurers have exclusions on pandemic-related deaths, illnesses and loss of income. Please check your insurance held inside superannuation. If you’re uncertain of your coverage for coronavirus, please give our team a call on 1300 135 205.

Applying for life cover during the outbreak

If you’re a new customer applying for a life insurance policy during the pandemic, you’ll need to comply with your Duty of Disclosure, including:

Disclosing if you have or had the Covid-19 virus or any flu-like symptoms, and Your planned/proposed travel plans. For example, if you’ve recently travelled to or are planning to go to a high-risk country. As part of the application process, we see select insurers also asking about your past travel plans to specific regions, such as China, Italy and Iran.

Possible underwriting outcomes after fully complying with your duty of disclosure:

Policy accepted at standard rates with no exclusions,

Policy declined due to your testing positive for Covid-19 or showing symptoms. Your policy will generally remain declined until you’ve made a full and complete recovery,

Policy declined because you have travel plans to a DFAT 4 region. However, you might want to request a preassessment as each insurer is treating these ratings differently. Please visit https://www.smartraveller.gov.au/ for updates on high-risk travel regions.

Take note: Each life insurance company has its own underwriting guidelines and will thus have varied responses to life insurance applications during the outbreak. You might want to shop around and compare plans from major life insurance brands in Australia.

Covid-19 and TPD, Trauma cover and Income Protection

While death due to the Coronavirus is a fear we all share, a healthy person is generally at a higher risk of potentially losing their income due to quarantine or temporary disability. Let’s look at the effect Covid-19 might have on TPD, Trauma Cover and Income Protection Insurance.

According to an article published by Riskino on 10 March 2020, Retail life insurers including AMP, MLC, BT, AIA, ClearView, TAL and MetLife responded that clients with existing policies that meet the eligibility criteria of a valid claim, as per their insurance terms and conditions, will be covered for TPD, Trauma and Income Protection insurance.

Is the Coronavirus a specified critical illness in a Trauma insurance policy?

Most Retail trauma insurance policies currently in the market do not specifically list Covid-19 as a critical illness. However, it’s best to consult your relevant product disclosure statement and insurer to be sure.

Will income protection payout if you’re unable to work due to the Coronavirus? Generally, there are no Coronavirus exclusions under a typical Retail income protection policy, so long as you meet the policy terms a condition, which vary between insurers.



Total disablement solely due to a sickness or injury in the context of an Income Protection policy means that you are: Unable to perform one or more important income producing duties of your occupation,

Under the regular care of a medical practitioner,

Unable to work for longer than your waiting period, following the advice of a medical practitioner,

Not working at all, whether paid or unpaid.

Are you eligible for a TPD benefit when diagnosed with Covid-19?

Generally, a Retail policy that covers total and permanent disablement would not have a specific exclusion for Covid-19. However, you must meet the policy terms and conditions to be eligible for the lump-sum payment as per your product disclosure statement.

Total and permanent disablement cover with an Any or Own occupation generally refers to:

You being continually absent from employment solely because of an injury or illness, for at least three consecutive months, and your medical practitioner provided you with all reasonable and usual treatment, including rehabilitation for the sickness or injury.

Your life insurance company will generally pay out a TPD lump sum benefit if it believes that after the three consecutive months and considering all your medical information and required documentation, you are:

Own Occupation: Incapacitated to such an extent that you are unlikely to ever again engage in your Own occupation.

Any Occupation: Incapacitated to such an extent that you are unlikely to ever work in Any business, profession or occupation, for which you are reasonably suited by education, training or experience.

Further information from some of the select insurers on the Coronavirus