COVID-19 continues to impact all of our lives, and at SC Insurance, we continue to receive questions from clients about what it means for their own personal insurance.
The following is a review of some of the key sectors of the insurance industry, and the impact of the current crisis. We have also provided comments or suggestions regarding what you should be considering when assessing your own insurance coverage and needs.
Note: As this situation is changing rapidly, please check back for updates and changes to our information as we receive from our carriers and industry partners. Feel free to contact us anytime for clarification. Updated October 20 2020
As a result of our new way of life, insurance companies have adapted, and are making it easier than ever to obtain individual insurance. Innovation has driven most companies to provide virtual online applications that can be completed from the comfort of your own home. We are also able to offer as much as $2M of Life Insurance, and $200K of Critical Illness protection without a medical for most clients. With these relaxed limits still in place, it is a good time to review your life insurance or apply for new coverage.
Published April 15, 2020, Darren Abrahams shares interesting opportunities related to life insurance and the Coronavirus in this article.
What is it? – Life Insurance is a contract that pays a lump sum to a named beneficiary in the event of death. There are many different kinds of policies available, but most fall into one of 2 types – Term (i.e. 10 year, 20 year) or Permanent (Universal Life, Whole Life).
Am I covered? – Life Insurance policies do not have an exclusion for COVID-19. If you should pass away due to COVID-19, your existing life insurance coverage would not be denied due to COVID-19.
Can I still get new coverage? – Yes. There are no limitations to the amount of life insurance you can purchase as medicals have resumed. And we continue to enjoy the higher limits available from most carriers, so that you can obtain valuable coverage without having to complete a medical in person.
Tips & Considerations – This is an ideal time to review your existing coverage amounts, pricing, and even review beneficiaries to be sure everything is up-to-date. Contact us for your own personal review.
What is it? – Long-Term-Disability (LTD) is coverage that replaces your income if you are unable to work due to accident or illness. There is usually a waiting period of 90 or 120 days before benefits are paid out. Benefits are typically paid on a monthly basis, up to max age 65.
Am I Covered? – If you are actively covered by an LTD policy, and you are unable to work beyond the waiting period due to the symptoms associated with having COVID-19, then you should be eligible to submit a claim under most policies.
Can I still get new coverage? – For the time being, if you are actively working and anticipate maintaining stable income, this coverage may be available. But the insurers’ position on this is constantly changing, and could make it difficult to obtain these policies at this time.
Tips & Considerations – This is an area that is constantly changing, and you may wish to review your current coverage with us. For example, if you have coverage through a group benefit plan, and are on temporary layoff, your disability coverage may not cover you during this period of time.
Critical Illness Insurance
What is it? – These policies cover a list of serious conditions, such as Cancer, Heart Attack, Stroke, and many more. The benefit is paid out as a lump sum, whether you are working or not.
Am I covered? – Policies have a set of covered conditions, and COVID-19 is not one of the listed conditions.
Can I still get new coverage? – At the time of writing, this coverage is still available from most insurers in Canada. We have solutions to allow you to obtain coverage via electronic application, and some policies available without medical underwriting.
Tips & Considerations – We believe that this product should be included in most people’s personal financial plans. And with some of the potential challenges re LTD eligibility during this period, we believe this is a powerful solution to protect families from the financial impact of dealing with a serious illness.
Health Insurance – Group Plans
During the early months of the crisis, most insurance plans provided premium relief and reductions for employee benefit plans, so that our clients maintained their valuable coverage when they needed it most. While things have resumed to a new normal, we are continuing to monitor the impact of Covid-19 on claims and trends that impact our clients and their benefit plans. Below is some general information about Group Benefits.
Most employee benefit plans include the following benefits:
- Life Insurance
- Accidental Death & Dismemberment
- Extended Health Care
- Dental Care
Many plans also include:
- Long Term Disability (LTD)
- Critical Illness
- Health Spending Accounts & Wellness Accounts
- Employee Assistance Plans (EAP)
- Virtual Medical Care
Am I covered? – As long as you are actively employed, your coverage should not be impacted, and coverage for COVID-related claims should be eligible. There are restrictions re travel insurance, which are constantly changing. You should look to take advantage of any EAPs, or if your plan has Virtual Medical Care, you can consult with a nurse or Dr from the comfort of your home.
Can I still get new coverage? – Companies looking for new or competitive plans can still obtain new coverage. Plans are available for companies with as few as 1 or 2 employees.
Tips & Considerations – Anyone who is losing Benefits due to layoff, termination or any other reason is eligible for a Conversion Health Plan. You must apply within 60 days of losing your group plan coverage.
If you are on temporary layoff, and concerned that LTD coverage may not be extended during this period, there are other solutions to help protect you and your family. One example is critical illness protection (below), or you may also be eligible to convert elements of your previous coverage.
For Business Owners – If you have contacted our office to remove any coverage from your group insurance plan please note that all paramedical and dental facilities are open in the Province of Ontario with COVID-19 restrictions at their locations. Our office can assist in adding coverage back to your plan as the Province has allowed for dental and paramedical services to resume.
Health Insurance – Individual Plans
There are 3 types of plans that are available for those without employee benefit coverage:
- Conversion Plans: for those who lost group coverage within 60 days.
- Traditional Plans: Available with limited or no medical questions.
- Independent Contractor Plan: unique solution custom-tailored for contract workers.
Am I covered? – Existing Plans should not be impacted, and coverage for COVID-related claims should be eligible. There are restrictions re travel insurance, which are constantly changing.
Can I still get new coverage? – All 3 types of individual plans are currently still available.
Tips & Considerations – Whether you lost group benefit coverage, or are not eligible for group plans, there are solutions available for everyone. Independent Contractors have historically not been eligible for benefit plans. Our custom-tailored solution is available for those working on a contract basis. No medical questions, and comprehensive options including Health, Dental, Life, CI, LTD and more. If you are self-employed, or own your own business, we have solutions tailored for you.
Am I covered? – The Canadian travel ban due to COVID-19 is currently ongoing. To stay up to date on the travel ban status please click here. We highly recommend that individuals limit their travel out of your home province to essential travel only. Our office is closely monitoring the Canadian Travel Ban status with our insurance partners and will update of any changes and/or limitations to new travel insurance policies as they become available. Travel insurance is always subject to change without notice so we advise our clients to also closely monitor and adhere to the Canadian travel advisories posted.
Can I still get new coverage? – Coverage for COVID-19 is may be available on select group plans and individual carriers. We recommend speaking with your group carrier or our travel insurance specialist for coverage availability surrounding your upcoming travel plans.
Tips & Considerations – It’s always best to adhere to the travel regulations that are set out by the Canadian Government. If you find yourself out of your home province and need an extension on your group plan or individual travel insurance, it is best to contact our office or your carrier to discuss options for coverage extensions.
Retirement Income Programs
What has changed as a result of COVID-19?
The Government announced a set of economic measures as part of the Government of Canada’s COVID-19 Economic Response Plan. That statement included proposed changes to the calculation of the 2020 required RRIF minimum withdrawal for registered retirement income funds (RRIF).
The RRIF minimum amount that must be withdrawn will be reduced by 25% for 2020. For example, if the 2020 RRIF minimum amount would have been $10,000, the reduced RRIF minimum amount will be $7,500.
There are no provisions to allow clients to recontribute amounts already withdrawn.
Can I still invest in these products?
Yes. While we don’t recommend making drastic decisions as a result of market fluctuations, times like these point to the value of having guaranteed investments. Many of the insured solutions we provide offer guaranteed income, regardless of market conditions. As of the time of this writing, these plans are still available for new clients and new deposits.