Frequently asked questions about insurance during the lockdown

The value of insurance is truly realised only when a crisis strikes.
The value of insurance is truly realised only when a crisis strikes.

Between all the noise and family WhatsApp groups we have been added to, despite ourselves, I hope you have taken some time during the lockdown to assess your finances and have come up with a plan on how you will take control of your money going forward.

Much has been said about relief packages for individuals and businesses, budgeting and investing.

I want to talk about the questions about insurance and Covid-19.

READ: Insurance policies you might not be aware of but need

At its core, the value of insurance is truly realised only when a crisis strikes. It is important, first, to understand the type of insurance you have.

  • Income protection
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If you are unable to work due to serious illness or injury, income protection insurance provides you with a monthly income over a certain period of time. If you can’t work because of the national lockdown, this is not a claimable event.

However, there is recourse for those who do contract coronavirus, according to Leza Wells, chief product actuary of life insurer FMI, a division of Bidvest Life.

If you can’t work because of the national lockdown, this is not a claimable event
Mapalo Makhu

“It all depends on the waiting period specified in your policy. Under a seven-day waiting period, you would qualify for a payout if you were displaying Covid-related symptoms as diagnosed by a qualified medical doctor and booked off as a result. This would be paid under the “minor infections” definition on short-waiting period income protection.

If you have a 14- or 30-day waiting period, you would be able to claim on your income protection policy if there were complications related to Covid-19 keeping you off work beyond that time and this was supported by a medical doctor.”

READ: Adapting financial plans for the lockdown

  • Insurance premiums

It is no secret that many people’s income will be negatively affected because of the coronavirus crisis. And when people think of tightening their belts, insurance seems to be the low-hanging fruit.

But before you cancel, first think about the options that are available:
  • Check whether your insurer permits you to take a premium break on your insurance benefits;
  • Most insurers allow a three-month grace period after which you will have to catch up and pay the three-months worth of premiums for the policy not to lapse;
  • Most insurers are offering their clients premium deferment, delayed payment options or premium discounts – check with your insurer if it has any of these options and see which option best suits your financial situation. For example: Old Mutual Insure is offering “customers who register on the iwyzeHUB before April 30 the opportunity to activate a three-month 7.5% discount on motor premiums”, this is according to Christelle Colman, insurance expert at Old Mutual Insure; and
  • Call your broker – your insurance broker is not just limited to finding the insurance cover that suits your requirements, but can also help you to adapt your premiums when your financial circumstances change.

The biggest lesson we should all learn about our finances during this crisis is that communication is key: Communication with your bank and other creditors and communication with your insurer. All these institutions are required by law to assess every situation case by case.

And, because we are all facing the same “enemy”, companies are doing their best to meet their clients halfway. Do your part: Communicate your situation with them.

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July 2020

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