We previously covered a topic on Business Interruption Insurance (BII). We noted how insurance companies may or may not be liable to provide BII coverage for a business that is shut down due to COVID-19. But do health and income insurance policies provide coverage for Coronavirus if you actually catch the virus yourself?
In this blog, we look at some of the income, medical health and life coverage related issues for patients infected by Coronavirus.
Is Coronavirus Covered in Loss of Income, Health and Life Insurance Policies?
The World Health Organization (WHO) has declared the COVID-19 a global pandemic. Unless your health insurance policy specifically excludes death, medical or income coverage in the event of a pandemic (most policies don’t), your insurer must provide medical, income and life coverage in case you get Coronavirus, depending on the type of policy.
Based on the standard health and life insurance policies that we have seen, almost no health insurance companies specifically cross out health coverage for pandemics or infectious diseases.
Basically, it means the following;
- If you have income protection coverage, get infected by the virus and have to take time off from work for treatment (or isolation), the insurer has to provide financial coverage for loss of income.
- If you have medical insurance, and become infected by the virus, the insurer is liable to cover treatment expenses.
- If a person with an active life insurance policy passes away due to Corona virus, their nominees will get the sum insured in the policy.
Business interruption insurance is quite distinct from a personal insurance policy. If you are diagnosed with the virus, the insurance provider must compensate you for the loss of income or medical expenses.
If your insurance policy has exclusionary conditions, it can be and should be, challenged in court.
Can You Get Coronavirus Coverage Now?
You should be able to buy an insurance policy that provides income, medical and life coverage for COVID-19. Federal law prohibits insurance denials due to pre-existing conditions.
However, as this situation progresses the insurer may gather data about your history of possible contact with COVID-19 patients and foreign travel. They may also check any infections in the family or social circle before approval. The insurance premiums may also be higher right now.
Exceptions that Can Get Claims Denied
There are a few situations in which the insurance company may deny your claim in case you get Coronavirus.
- The claim can be denied if the insurance company has evidence to prove that you were dishonest in your application about your health condition, travel history and pre-existing medical conditions.
- The claim can also be denied if you do not follow the precautionary medical advice or treatment procedure recommended by healthcare experts. Deliberately putting yourself in harm’s way can be used to deny any claims.
- Lastly, a life insurance claim may not apply in case of a critical illness condition where the policy explicitly excludes coverage for that illness. Consider the case of a person with a heart condition who becomes infected by the Coronavirus but dies due to heart failure. If the policy explicitly excludes coverage for death due to heart failure, the nominees may not be able to win a death benefit claim unless it can be proven in court that heart failure occurred due to Coronavirus.
If a legitimate insurance claim is denied or purposely delayed, this is called bad faith and you potentially have a claim against the insurer. Insurance providers are required by law to operate with “good faith” with their insureds which means your insurance policy holder must be considerate of your needs and must communicate with you honestly about your policy and their responsibility to your claim. Consult a lawyer to find out your options if your coverage is denied.
Should You Get Income, Health, and Life Insurance?
The short answer is yes. It provides you and your family with financial coverage in case of unexpected disaster, like the one we are seeing right now.
Likely, the majority of people in the U.S. will not be infected by COVID. More than 90% of those that do become infected will get through it with medical help. However, the insurance coverage will help protect you against other risks in life.
Stay Safe and Practice Social Distancing!