Q: I have a pre-existing illness that puts me at a high risk for developing health complications, if I get the coronavirus. What does this mean when shopping for a new policy that includes Covid-19?
Allen: You must declare your pre-existing illness to the insurer. The outcome may be exclusion, postponement or even rejection of your application. If the insurer discovers that you have intentionally withheld this information, it has the legal right to void the policy. An insurance policy is a risk-pooling legal contract, and not like other financial products that you can buy based on financial merit. Risk pooling means that the insurer is pooling a (large) group of people of similar risk. Therefore if you have pre-existing illness, it will affect the risk pooling unfairly.
Q: Should my insurance policy also include employment cover in case I get Covid-19 and have to take months off work or lose my job?
Allen: It’s up to the insurance company whether or not they can pool enough people to offer such coverage in a sustainable way. Currently, such a policy is not common. If an insurance product is not common it does not mean there’s no demand for it; it means that the insurance company is not (yet) confident about the sustainability of insuring such risk.