Can insurance help during a pandemic?
Covid-19 has had a devastating impact on people’s lives and global economies. Insurance plays a critical role in ensuring that individuals and businesses have the ability to mitigate unexpected financial shocks and preserve assets.
One dramatic example of this is in the sporting arena - Wimbledon is set for a coronavirus windfall in a huge pay-out from pandemic insurance, said to be in excess of £100 million. It has learnt from the SARS outbreak, taking out pandemic insurance since 2003.
How are businesses coping?
Companies that have had Business Interruption (BI) Insurance in place have had mixed results following covid-19 claims. There is continuing and widespread concern about the lack of a positive response of some of those BI insurance policies, and the basis on which some insurers are making decisions in relation to claims. On 1st May 2020, the Financial Conduct Authority (FCA) released a statement that they intend to obtain court declarations aimed at resolving contractual uncertainty in selected BI insurance policies. Acting in the public interest, the FCA will put forward policyholders’ arguments to their best advantage.
The Association of British Insurers (ABI) has published information on their website about BI Insurance and in particular their principles for handling BI claims related to covid-19.
What about insurance for individuals?
One of the biggest concerns for employed people at this time is the prospect of being made redundant. Redundancy insurance is a form of income protection that can pay out if you lose your job through redundancy. Policyholders can be paid through a tax-free monthly income, which starts after a pre-agreed waiting period.
Travel insurance has also been a huge comfort to those whose holiday was cancelled due to the pandemic, or worse, for those who needed emergency treatment overseas.
There are other types of insurance policies available for individuals and families, covering a wide range of scenarios, including:
Life insurance & mortgage protection - provides a lump sum on your death, which you can choose to link to your mortgage or it can remain separate and be used for any purpose.
Critical illness cover - provides a lump sum on the diagnosis of a specific illness, such as cancer or heart disease. Often you can choose to include cover for a child.
Income protection - provides a regular income if you are unable to work due to long term illness.
Family income benefit - provides a regular income to your family on your death.
The benefit of insurance cannot be overestimated, not least for the peace of mind it can bring to you and your loved ones.
To read more about personal finance and your money, you can find more articles over on our news page. Alternatively, if you have specific questions about insurance and your protection needs, please get in touch to speak to one of our Advisers. Don’t forget, this article offers information about financial planning and should not be taken as personal advice.