Does my personal insurance cover me for COVID-19?
30 March 2020
This is a "how long is a piece of string?" question - one that can't be answered with a simple answer.
For example, if you have trauma cover and get COVID-19, then the answer is most likely a no. If you have life cover and pass away from COVID-19, then most likely a yes. Morbid but true.
The question to start with is:
Do you (yes you) know if you are protected for COVID-19?
And more importantly, do you know what you are covered for aside from COVID-19? This, in the long term, is equally if not more important.
Which leads to:
Do you know how much you are worth, and the impact in an unforeseen event such as COVID-19 if you can’t work? What I mean by this, by way of comparison, is we all have car insurance in case it gets damaged - and we know its worth. We have business insurance for a similar reason. What does the impact of you becoming ill have on your ability to pay your mortgage, have a family vacation, or put food on the table?
Have you had your personal risk reviewed to understand what insurance is needed (if any)?
What plan do you have in place from a financial and non-financial perspective?
When did you last undertake a "proper" risk review? ("Proper" rules out a quick phone conversation or general chat in the local café).
Dennis Waitley, a published and respected speaker wrote, “Life is inherently risky. There is only one big risk you should avoid at all costs, and that is the risk of doing nothing.”
Whilst Dennis was referring to getting out there and having a go, it is also relevant to our own personal risk and to:
a) Create a plan to have in place should something happen to us, our business or a loved one; and
b) Review our insurance to ensure it is still fit for purpose.
The act of doing nothing and not preparing is the real risk.
Here are four main reasons to “not do nothing”:
1. Ensuring you have a plan in place
A good Financial Adviser will go through your risk and determine how best to plan. This includes non-insurance discussions as much as insurance cover. COVID-19 has highlighted that we do not know what is around the corner and “doing nothing” is not a plan.
2. Ensuring you know your risks and how you are protected
Even when freshly done, insurance can still boggle the brain and knowing what, how and why you are protected is not easy. Do you know how you are protected with income protection and your waiting period before you get paid? Over time our knowledge and understanding of what we have and why we have it becomes less clear.
3. Save money
We all want to save money, right? This is better titled "provide real value" and what that means is paying for the things that protect you best, and getting rid of those that don't – simple as that.
4. Our circumstances change
This is the number one reason to have regular reviews. You may have brought on a new business partner, added business debt, you may have gotten married, or divorced, had a child, the children have left home, changed jobs, got a pay rise, became part-time employed, moved to a new house, paid down mortgage, increased mortgage, and so on and so on - you get the picture right?
Ideally, we should review our insurance every 12-24 months, and a good adviser takes away the confusion, structures the right plan for you and supports throughout the entire journey.
COVID-19 has been a wake up call for society on many fronts. One of them is ensuring you have a plan to protect the things that are most important to you.
In short, call your adviser so you understand your risk and how you are protected.
Findex has developed a Government Stimulus Health Checkand free Business Wellbeing Toolkit to help businesses manage potential risks and take full advantage of eligible stimulus assistance. Book your Health Check here.
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