How does COVID affect personal insurance policies?

We have received several questions on whether existing Life, Total and Permanent Disability (TPD), Income Protection and Trauma insurance policies provide cover should you get COVID or suffer a severe adverse reaction to the COVID vaccination.

The short answer is that you are still fully covered if you contract the COVID virus. Should you die, become permanently disabled, suffer a trauma event (such as a heart attack, stroke or cancer) or are unable to work as a result of contracting COVID, you are covered.

You are also fully covered if you suffer an adverse reaction to the COVID vaccination if it results in death, permanent disablement, having a trauma event or being unable to work due to the COVID vaccination.

Under retail insurance policies, the insurance companies cannot add new exclusions to the policies once they have commenced. For new policy applications, the underwriters may ask additional questions to consider the risk of the applicant contracting COVID. However, standard COVID or pandemic exclusion terms are not part of current retail insurance policy definitions.

Another frequently asked question is whether a claim can be made under Income Protection cover for loss of personal or business income because of lockdowns and other COVID related disruptions. The answer here is no – a claim under Income Protection must be health-related, that is due to an illness or accident resulting in being unable to work.

Please do not hesitate to get in touch with our insurance specialist John Green via (03) 9810 0700 or j.green@banksgroup.com.au if you have any COVID related insurance questions or require assistance.


This article is intended for general discussion and is not intended to represent specific advice. Banks Group shall not be responsible for any entity that acts on any of the comments in this article without first obtaining specific advice from Banks Group.

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