How COVID-19 Affects Insurance Policies

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Two weeks ago I wrote about how trip cancellation insurance works since that was a major concern for many people, but the world has changed quite a but since then.

COVID-19 has struck the economy and many Canadians are doing the right thing by looking at their budget to see where they can slash their expenses as an economic downturn is a certainty. For many people, their insurance policies are a major monthly expense so they’ve made calls to find out if there are any sort of financial relief available within their plans.

Since insurance really isn’t my specialty, I reached out to Jeff Romansky of SecurePlan Insurance Solutions who explained how your insurance works during this global pandemic and if there’s any way you can unlock some funds or make a claim.


As a disclosure, the information below is not meant to provide you with specific advice as it doesn’t pertain to your exact coverage. This is more to provide general insight on the matter, and it’s recommended that you discuss the contractual provisions within your policies with your insurance broker or company.

All the information below is based on what we know as of March 17, 2020. As you’re aware, the situation of COVID-19 is changing daily and the policies and procedures that are being implemented are also changing on the regular. Here’s how Coronavirus affects various insurance policies. 

Life insurance

For the vast majority of the individual term life and permanent life insurance policies out there, the only exclusion within the contract is suicide within the first two years of owning a policy. Some clients who disclose high-risk activities may have an amendment excluding such activity as a part of their policy as well. This means that the carrier will very likely pay out a claim if the death is related to COVID-19.

If your life insurance policy has a cash value as a component, you could potentially access some of that cash if your current cash flow has been affected by COIVD-19. Alternatively, you could consider taking a loan out against your policy at this time if you have enough cash value. Mind you, this would put you in debt.

Disability insurance

With disability insurance, you likely will not be entitled to any sort of claim/financial relief unless you have been tested positive for COVID-19 and/or have symptoms that are preventing you from working. This is the case even if you needed to self-isolate on a voluntary basis or at the direction of your employer, or government. If someone does not have signs or has not tested positive for COVID-19 and placed under quarantine, disability benefits will very likely not be payable. However, the government of Canada has already announced that workers affected by Coronavirus would likely qualify for Employment Insurance under the sickness benefit.

Disability contracts are designed to provide clients with an income when they meet the definition of being disabled and satisfy the waiting period. The benefit to most disability contracts is that they look at the result, which is being unable to work due directly to an injury or illness, regardless of the underlying cause. This means that there is typically no exclusion for COVID-19 or any other health issue.  One could have an undiagnosed condition and still be eligible to claim as long as if the symptoms itself are preventing them from working.  Disability insurance is not designed to pay out in the event that someone is unable to work due to losing a job, losing a license required for their job or being in quarantine/isolation.  Although difficult situations, none of these are considered a disability as it is not an injury or illness preventing them from working.

When it comes to long term disability insurance, there would be no relief unless you had Coronavirus itself. Even then, I’m not 100% sure how this will be viewed as the symptoms itself may not prevent one from working. In most cases, claimants will not satisfy the waiting period as typically one needs to be off work for 3 months (or longer) to be eligible for a claim.

Critical illness insurance

Unfortunately, if you’re diagnosed with COVID-19, you will unlikely be able to claim critical illness insurance. This is because COVID-19 is not a listed covered condition within the policy. Critical Illness policies have a specific list of illnesses (and definitions) that need to be met in order to make a claim.

Can you still get insurance?

If you have recently travelled, your policy may be postponed (depending on where you travelled) until you have been back in Canada for a minimum of 14 to 30 days (depending on the carrier). After the quarantine period ends, the insurer may consider reopening the file. That said, a statement of good health will be a requirement. 

If you’re currently diagnosed with Coronavirus, most carriers will not be able to offer coverage at this time. However, it looks like carriers would possibly consider coverage once the applicant has recovered fully. You could get some specialty products for the time being, however coverage will come at a higher cost and certain limitations may apply.

The good thing is that many insurance brokers are set up to work virtually. This means that you do not need to meet in person to start the application process. However, getting your policies in full might be tricky as currently, some paramedical companies are suspending all services. What this means is that if you’re required to provide a blood/urine sample, you may not be able to do so at this time. You can still apply, to get the process started, but most carriers have certain limits of coverage that you can purchase without any blood/urine requirements. Talk to your broker to know your options. 

With that said, you should expect delays in service levels given the increased demand on our health care system and changes to business processes to ensure the safety of their employees.


Jeff Romansky is an insurance broker based in Ontario and the founder of SecurePlan Insurance Solutions. He has been in the industry since 2006 and works diligently to ensure that his clients are properly informed. Leveraging today’s technology, SecurePlan is capable to work with its clients on a virtual basis.

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