Group Risk benefits COVID-19 information and FAQs

Normally, there are no exclusions for the payment of death or disability claims. However there are a couple of circumstances where you should seek guidance. All life assurance policies operate catastrophe limits. That is where multiple deaths arise from a single originating cause. The pandemic will count as a “catastrophic event”. When placing and reviewing insurance markets we try to make sure the catastrophe limits offered by insurers are sufficiently high to cover unexpected outcomes.

The second area of concern is travel where many providers have a general limitation around overseas travel where this is specifically against Foreign & Commonwealth Office (FCO) advice. Again, given the current circumstances we do not anticipate that you will have employees overseas who are not already known to the insurer; or where the travel overseas occurred before the FCO restriction came into effect. If you have any employees permanently or temporarily based overseas, contact your Howden consultant for clarification.

Normally, there are no exclusions under group income protection policies where benefits fall within ‘free of medical underwriting limits’ (or where standard terms are provided, following any required underwriting) and if the individual completes the deferred period and continues to be medically assessed as unable to work, then benefit will be paid.

For critical illness COVID-19 is not a specified condition and so cannot directly give rise to a claim, however if whilst suffering from COVID-19 a member suffers from one of the conditions (whether as a result of COVID-19 or not) the claim will be eligible as long as all other policy conditions are met.

To initially be included in a policy, or to benefit from an increase in benefit, most polices require an employee to be actively at work. If an employee is working from home, or is capable of working whilst at home, then as long as they remain an employee they will be considered as meeting any insurer ‘actively at work’ requirements. However, if an employee is ill, for coronavirus or any other reason, then they will not be considered as actively at work.

Employees working normally from home are actively at work and covered under the policy just as if they were working in their normal place of work.

For group life assurance all policies have a temporary absence clause which allows for employees to be absent from work and continue to be covered whilst employed. Those employees unable to work, but who importantly remain employed, can continue to be covered and will be covered based on their salary in force before the period of “furlough” (remaining an employee but on nil or reduced pay), as long as this is declared to the insurer.

For group income protection if an employee is not working then, in normal circumstances cover would cease but as long as the employee is fit and capable of working and remains an employee then insurers are generally willing to continue to offer cover but are keeping the position under review.

For critical illness, again as long as they remain an employee, benefits (subject to policy terms and conditions) will continue to be covered. Sometimes the benefit is a fixed level of cover rather than salary related. Where benefits are expressed as a multiple of salary all the leading insurers have agreed to honour benefits based on the salary in force before the outbreak. Please contact your Howden consultant if you require clarification.

The admittance of any claim will be based on the insurer receiving all and necessary evidence to support a claim. For life assurance this may be claim forms and death certificates or inclusion on the death register. For income protection and critical illness claims this will be claim forms and submission of medical evidence in support of the relevant claim. Such evidence is usually gathered from the member’s consulting GP. In the present circumstances there may be delays in gathering this evidence.

We are working with providers to minimise the need for sending hard copies of documentation to them. We are also looking at trying to minimise the need for detailed health requirements, but this will not always be possible. We would urge employers to start the claims process as soon as is practicable. In particular, potential income protection claims should be notified well before the expiry of any deferred period.  We would usually recommend bringing our attention to prolonged periods of illness or disability at around 6 weeks, or even earlier depending upon circumstances and severity.  This would also provide insurers with the opportunity to intervene with support during a deferral period where they feel this might be appropriate. If in doubt please speak to your consultant. 

Understandably the position for employees outside the UK, under local or international contracts is not quite as clear. Where we look after the policy and it is written as an international policy then we are seeking, as far as possible, that terms will replicate those offered by UK based insurers. If the policy is written locally overseas then you will need to contact the local provider or broker for further information. Please contact your consultant if you have any specific queries.