How COVID-19 Affects Life Insurance Policies in the UK | GBAF

How COVID-19 Affects Life Insurance Policies in the UK | GBAF

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Home > Top Stories > What to be aware of when arranging life insurance post COVID-19

What to be aware of when arranging life insurance post COVID-19

Published by linker 5

Posted on July 10, 2020

4 min read

Last updated: January 21, 2026

Life insurance policy documents and a calculator for financial planning - Global Banking & Finance Review — An image showcasing life insurance documents and a financial calculator, emphasizing the importance of understanding policy terms post COVID-19, including pandemic exclusions.

The outbreak of COVID-19 has been one of the most prevalent events in the 21^st century. It has seen schools and businesses close, the death toll reach extraordinary highs and a complete overhaul to the way we carry out daily life as a society.

But one industry that has thrived during this period of uncertainty is the life insurance industry. UK citizens have flocked to life insurance providers across the country to ensure that their loved ones would be protected should the virus take their life.

But as lockdown eases and we adapt to a ‘new normal’ there are still a number of looming questions regarding how the presence of COVID-19 will affect life insurance and its protection moving forwards.

Reassured, the UK’s largest life insurance broker provided us with 3 key aspects the population should be aware of moving forward.

These include;

Pandemic exclusion
Waiting periods
Writing your policy in trust

Pandemic exclusion

Whilst it has been clarified that the majority of life insurance policies would be valid and provide a successful pay out if someone were to pass away due COVID-19, some policies do include a ‘pandemic exclusion’.

This is a clause which states that if death occurs due to a nationwide or global pandemic then cover is invalid and no pay out will be made. The only way to be certain whether cover includes this exclusion would be to read the terms and conditions supplied when the policy began.

Whilst it is not uncommon for life insurance providers to include this exclusion, the recent pandemic has brought to the forefront the grave realisation that the human race is not immune to such occurrences. Therefore, it can be strongly predicted that the likelihood of such an exclusion becoming more common will increase.

As a result, when arranging life insurance, it is essential to be familiar with the terms and conditions of your individual policy.

Waiting Period

With the increased risk of COVID-19 lying with the older generation, over 50s plans have increased in popularity. These are life insurance policies tailored to those in their golden years; no medical information is required, and premiums are priced based on age alone.

However, what isn’t often well known is the waiting period attached to such plans. The providers of over 50s plans introduce a period of time the policy must be in place before a successful pay out can be made due to natural causes as a way of offsetting their risk. This is usually between 12-24 months.

As a result, arranging life protection via an over 50s plan will not provide a successful pay out if death occurs due to COVID-19 or any other future pandemic if death occurs before this waiting period has been satisfied.

Write your policy in trust

The presence of COVID-19 has made human mortality more prevalent than ever. And the financial strain it has brought with it has been extravagant. As a result, it is important to make the most of any life insurance investment you make, new or existing.

Writing your life insurance policy in trust detaches its value from your estate, making it exempt from current UK inheritance tax law. This will not only ensure your loved ones receive the full 100% of the pay out sum but will also reduce the overall inheritance tax retrieved from your remaining estate.

The process is simple and easy to complete, and many customer service teams, such as the one at Reassured, will help you complete the form free of charge.

Conclusion

The evolution of COVID-19 and its presence in our society can still not be predicted and the fear of a second spike becomes increasing as daily life resumes. Therefore, being aware of the impact it will have on life insurance only grows in importance. Reading your policy documents and understanding all aspects of your cover is and will remain paramount.

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