Coronavirus/COVID-19 and Income Protection Insurance

On 16 March 2020 Nick Stanhope, CEO of New Zealand's largest insurer, AIA New Zealand. acknowledged that "we're beginning to receive questions from our customers about what Covid-19 may mean for their life and health insurance policies.

His statement to the Herald was that "our insurance products do not contain any exclusions for pandemics, so as with any claim, customers would need to meet the ordinary claim eligibility criteria for their particular insurance benefits."

“AIA's income protection products provide a monthly benefit to customers who are incapacitated and unable to work due to illness or injury, including customers incapacitated and unable to work due to Covid-19”

It is important to note that the NZ Financial Services Council admits that 25% of Income Protection claims are declined. Furthermore, most disability insurance claims are paid in arrears. This means, if you have a 30 day wait period, you may not be entitled to your first benefit payment until 60 days after you cease working.

Based on the above it is hard to see what benefit, if any, would be available for those who contract coronavirus and wish to make a claim on their Income Protection insurance.