If you want to buy life cover during the lockdown, you will have to accept a limited cover policy until the lockdown is over and you can undergo a medical assessment. 

The Financial Sector Conduct Authority (FSCA) has clamped down on insurers who continue to send out travelling nurses to conduct tests on life assurance applicants, claiming they are an essential service required during the lockdown. 

“The practice of collecting blood samples for new business underwriting purposes not only exposes nurses and customers unnecessarily but detracts from the ability of laboratories to focus efforts on the Covid-19 pandemic,” Kedibone Dikokwe, divisional executive for business conduct at the FSCA, says, adding that the FSCA views this conduct in a very serious light. “Insurers are reminded to limit essential services to those necessary to support the functioning of the financial system and maintaining a stable financial environment.” 

Hennie de Villiers, deputy chair of the Association for Savings and Investment SA (Asisa), the industry body for life assurers and investment houses, voiced support for the FSCA’s stance. 

“While medical testing is an important undertaking for insurers to accurately assess your risk and price for it, we indicated to our members last week that the collection and testing of blood samples, as well as medical assessments for insurance purposes, should not be conducted during the lockdown period,” he says.

De Villiers noted that doctors or nurses consulting multiple clients would increase the risk of spreading the coronavirus and breach social-distancing guidelines. 

What this means for you

Typically, when you buy life insurance, you are expected to undergo medical underwriting that the insurer uses to assess your risk level and determine the premium you pay for your cover. 

De Villiers says if you want to buy life cover during the lockdown period, there are several options available: 

• Limited or simplified underwriting cover 

These products typically do not require medical examinations but may still require blood tests to test, for instance, for HIV and cotinine (smoking). Many of these products will provide cover subject to the tests being performed within a period of a few months, depending on the insurer.

• Fully underwritten risk cover, with terms and conditions 

Some life insurers may accept applications for fully underwritten risk cover during the lockdown, based on your answers to medical questions. De Villiers notes that these contracts are likely to contain clauses that allow the insurer to change the terms of the contract once they are in a position to conduct medical tests. These changes could include higher premiums, exclusions or a complete withdrawal of cover.

• Fully underwritten risk cover 

This generally only requires medical examinations and blood tests for a certain level of cover depending on your age and answers to medical questions during the application process — this may vary per type of cover applied for. “However, life insurers are likely to do stringent checks should they receive early claims on these policies. Insurers might, during this time, also ask for additional information from other sources, such as your doctors, to help them better assess the risk,” De Villiers says. 

Important tips 

• Consult your financial adviser: De Villiers recommends that you speak to your financial adviser (telephonically, by e-mail or online) to make sure you understand exactly what you are signing up for and what the full implications will be before you take out cover.
• Be completely honest when answering the medical and lifestyle questions on your life cover application forms. “Rather err on the side of caution. If you are not sure whether information could be considered as material by the life insurer, rather disclose it,” De Villiers says. 
• Balance the need or desire for cover with your ability to afford it. There is no point to taking out life assurance worth R10m if you can’t afford it.
• Ask different life insurers for quotes then go through the different quotations with your financial adviser. Life assurers may offer different add-on benefits that are difficult to compare, but ask your adviser to help you compare the essential cover. 
• Keep your life insurance documents in a safe place and make sure your partner, spouse and/or dependents know what life assurance policies you have in place.