I am medically vulnerable and very concerned about catching COVID-19. I don't have any savings apart from my small industry fund super balance ($6,000). My job is uncertain, and my income has dropped by over 50% in the last few months because of the virus. I am worried about whether my insurance in my super fund will cover me if I lose my job. I am also worried I may not be able to claim on my insurance if I get sick from COVID-19 because I heard that insurance policies do not cover pandemics. What should I be doing to make sure I am covered?
Louise in Dapto, NSW
It is completely understandable that you would be very concerned with Covid-19 given the recent second wave in Victoria and its continuing spread around the world with no cure as yet. It is best to follow the guidance from the government on social distancing, wearing masks in public, and on hand hygiene to keep yourself safe.
With regards to pandemics or epidemics, Canstar (Australia’s largest financial comparison site) has not identified any life insurance policies that exclude pandemics or epidemics altogether. Therefore, most if not all insurance policies will provide protection even in a pandemic situation. However, it would be prudent for you to check with your insurance provider in your super fund.
If, however, you are a healthcare worker and took new cover out between 11th March 2020 and 6th of April 2020, you should check with your insurer as some did have exclusions during that time to covid-19. From 6th April 2020, insurers were allowed to collaborate to ensure front-line healthcare workers didn’t face exclusions.
To be covered for loss in income, you would need to have Income Protection or Salary Continuance covers (either in your super or outside). This insurance will cover you only if you are unable to work due to sickness or accident. These covers unfortunately do not cover for loss in earnings or in the instance where you lose your job.
Most industry super funds offer default cover of Life and Total and Permanent Disability. However, these are only paid out upon death or disability of the insured member. Again, these would not be of any help in the case of job loss or loss in earnings due to the economic environment we are facing during this Covid-19 pandemic.
It is important for you to check with your super fund as to what covers you have in place as part of your super policy. You should then seek advice from a financial adviser to look at what insurance you should have in place to cover you and your family in case of an unforeseen event. The adviser should also be able to help ascertain what government covid-19 economic provisions could be of assistance with your job and income loss should you need it, such as accessing your super, jobseeker, etc. to name a few.
These are extremely difficult times, but we will all get through it together. Wish you all the best.
Response provided by Aziz Meherali from Elixir Private Wealth.
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