Coronavirus and Life Insurance: What Is the Impact?

The Covid-19 pandemic has taught us many lessons — one of which is how important it is to build a healthy financial safety net.

April 1, 2021

One key component of long-term financial planning is buying life insurance, which helps your family live comfortably even if you are no longer around.  

If you are wondering how the current pandemic will affect your life insurance application or existing policy, here is what you need to know.  

Does life insurance cover pandemics?

Man in Home Quaratine after Positive Covid 19 Test

Thousands of people have died worldwide from coronavirus, otherwise known as Covid-19. If you already have a life insurance policy, your beneficiary will receive the death benefit amount if you were to pass away from Covid-19.

However, there are a couple of exceptions. Let’s find out more about them.

When does life insurance not payout?

An insurance carrier may deny a claim for death due to Covid-19 if you:

  • Submitted incorrect information in your application

Life insurance policies have a contestability period in which insurers can investigate and deny a claim. The contestability period lasts one or two years from the date the policy was issued. If you die within this period, the insurer can check the information on your application for inaccuracies. Insurers can deny the claim in the event of incomplete or inaccurate information.

  • Did not make insurance payments on time

Your life policy lapses when you stop paying premiums. If you pass away before reinstating the lapsed policy, your beneficiary will not receive a payout.

Insurers usually offer a grace period of 31 days to policyholders who are late in paying their premium. Your policy will cover you as long as the grace period is still in effect. Some insurers may have extended the grace period during the pandemic. If you are late on your premium payment, check with your provider about how long you have before the policy lapses.

Ultimately, if you have an active life insurance policy that is no longer in its contestability period, you can rest assured that the insurer will pay the death benefit amount to your family if you were to die from Covid-19.

How does travelling to a Covid-19 zone affect my life insurance policy?

Woman With a Face Mask Standing on Train Station

When you sign-up for a new policy, the insurer inquires about your past or future travel plans. If you give inaccurate or incomplete information and die soon after taking the policy, your family will not get the payout.

The bottom-line:

  • If your life insurance policy is in its contestability period and you have travelled to a high-risk country or plan to do so, tell your insurer. Honesty is the best policy here.
  • If you have travelled to a Covid-19 zone and your policy is no longer in its contestability period, you have nothing to worry about. Where you travel to or how often will not affect your policy.

Applying for life insurance during the coronavirus outbreak?

While the Covid-19 outbreak has had a big impact on the health insurance industry, the life insurance sector has largely been left unscathed. Barring any unforeseen circumstances, life insurance during a pandemic may work slightly differently for people applying for life insurance than those who already have an existing policy.

If you have life insurance and die from Covid-19, the insurer will issue the death benefit to your family. However, if you are applying for life insurance, your application might be affected in certain scenarios.

Most insurers are likely to delay the approval process if you have returned from travel outside Canada in the last 30 days. Additionally, your application approval may also be postponed if you have plans to travel abroad in the future. Insurers may postpone your application if you have come into contact with anyone with Covid-19 in the last 30 days.

How each insurer will treat your life insurance application in these scenarios will vary. Some may postpone the offer for 30 days, others for longer.

Furthermore, some insurers have become more selective about who they approve of. If you are older or have an underlying health condition that puts you at higher risk for Covid-19, you may face new restrictions. Some insurers may decline your application, while those who accept you may charge higher premiums.

What if you submitted your life insurance application before the coronavirus outbreak?

A girl is launching a paper airplane from a window

Those awaiting approval on their policy should notify their insurance carriers about their travel plans, past or present. This is especially crucial if you have traveled or plan to travel to a high-risk country, like China, Italy, or India.

You may have to pay higher premiums, but at least your application will be accepted. Also, chances are you will have to wait longer than usual to receive approval.

If you already have life insurance, you have nothing to worry about. Your policy will cover you should you pass away due to coronavirus. If you are a new applicant, be upfront about your travel plans. Also, answer Covid-19 specific questions truthfully, if asked. While some insurers are now more selective about whom they accept, you still have options. Dundas Life can help you locate a life insurance policy that fits your needs and budget.


Will life insurance cover me if I get the coronavirus?

If you already have coverage, your family will get the payout if you die due to Covid-19.

If you are applying for life insurance, keep in mind that the insurer will ask you some Covid-19 specific questions. If you reply in the affirmative to one or more of these, your application may be postponed.

Common Covid-19 specific questions that insurers may now ask as a part of their application process include:

  • Have you tested positive for coronavirus in the last 30 days?
  • Have you had any symptoms of coronavirus in the last 30 days?
  • Have you been in direct contact with anyone with Covid-19in the last 30 days?
  • Have you been advised to self-isolate in the last 30 days?

Expect a delay in approval if you said yes to any of these questions. How long your application will get postponed will depend on the insurance company, but usually it is about 30 days.

Should I buy life insurance that does not require a medical exam?

Those who are unable to take the medical test because of the Covid-19 outbreak can consider buying no-medical life insurance. As the name suggests, these policies do not require a medical test. A life insurance plan can provide financial support to your family if you die prematurely. Dundas Life will help you explore your options and to better understand what works for your family.

What happens if I die from the coronavirus during the application process?

Life insurance coverage does not become effective until you pay your first premium payment. If you die due to Covid-19 during the application process, your family will not receive a payout. That is because you did not have a life insurance policy at the time of death.

You can buy temporary life insurance to get coverage during the application process. It gives you protection between the time you submit your application and pay the first premium. It ensures your family can get a death benefit even if you pass away before completing the application process.

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