The new Coronavirus Covid-19, commonly known as Wuhan virus, has certainly spread fears globally. With the increasing number of the death toll and affected people, have you wondered if your insurance is a line of defence of your family’s wealth? After all, you have purchased the insurance to protect the uncertain in life right?

Insurance terms and conditions can be complicated. I have gathered and summarized the scattered information and hopeful this article can give you a quick guide. Note that the information below is based on the general insurance industry practice. Your own policy may have different terms. If in doubt, please check with your own adviser.

Life and Critical Illness Insurance

Generally speaking, the following losses due to coronavirus are covered:

  • Death
  • Terminal illness
  • Total and permanent disability

If your policy provides an Accidental Death Benefit, death due to COVID-19 does not qualify as an accidental death.

Coronavirus is not one of the commonly defined 37 critical illness conditions. However, the complications of Covid-19 may be admissible upon one of the critical illnesses, “Diagnosis of End-Stage Lung Disease”, if it meets the insurer’s definition.

Hospitalisation Insurance

Most hospitalization benefits, including the private integrated shield plans, should cover the following costs associated with Coronavirus

  • Hospital stay
  • Surgical expenses
  • Pre-and post-hospitalization outpatient expenses
  • Hospital income if your plan has this feature.

This should apply to most of the employee benefit as well if you are covered by a group medical insurance.

You may also wish to note that the Singapore Government will foot the bills of infected patients at public hospitals.

Personal Accident Plans

Being infected by the coronavirus is not considered as an accident, thus it will not be covered by under such plans.

Disability Income Insurance

Disability income insurance covers loss of income due to illness or accident. Coronavirus does not fall into the standard exclusion, thus if you suffer long term loss of income due to this disease, it should be covered. However, most people will recover within weeks, they will not meet the deferred period (3 or 6 months) requirement of a typical disability income insurance.

Travel Insurance

Most travel insurance purchased after end Jan 2020 (exact dates depend on the insurers) are not eligible to claim for any loss related to COVID-19 as it is a known event. All other claims unrelated to this event generally continue to be covered.

You should also note that if you are travelling to a country and against the travel advisory issued by the Ministry of Foreign Affairs, you will not be covered.

Update on March 3: In light of the development of the COVID-19 outbreak situation, Singapore’s Ministry of Foreign Affair (MFA) has issued a non-essential travel advisory to Mainland China on 27 Jan 2020, Iran, Northern Italy, Japan and the Republic of Korea on 3 Mar 2020.

Work Injury Compensation insurance

If you work in Singapore, you are protected under the Work Injury Compensation Act (WICA).  You can claim compensations due to work-related injury:

  • Medical expenses.
  • Medical leave wages.
  • Lump-sum compensation for permanent incapacity.

The question is if WICA covers employees who contracted the Novel Coronavirus due to work?

The Ministry of Manpower (MOM)’s reply is Yes:

WICA covers employees who contracted diseases from any biological agent, including the Novel coronavirus, arising from and in the course of work.  However, WICA will not cover diseases due to the Wuhan coronavirus if it was contracted through non-work activities or exposure

In addition, MOM had also clarified that suspected quarantine cases (diagnosed as negative) will not qualify for WICA cover.

Also, the quarantine period is not considered medical leave, but compulsory annual leave, thus the medical leave wages is not claimable.

Free Insurance Coverage for Coronavirus

Recently many insurers offer free coronavirus protection benefits. Below is a quick summary of what has been announced so far. For more information, please check the update from respective insurers’ website.

Free coronavirus insurance coverage. Updated: Feb 24, 2020

In a nutshell…

New coronavirus Covid-19 has disrupted our daily lives but it is not the end of the world. It certainly makes sensational news headlines,  but the impact will be short-lived.

The fact that the insurers are willing to offer free protection benefits clearly shows that at least the actuaries (the one who calculate the insurer’s payout probability) are not so concerned given the information as we know today.

On Feb 4 during the darkest time of the financial market when China stocks lost 20% in 2 weeks’ time, I was interviewed by CNA938 and I talked about human adaptiveness. Two weeks’ later as of today, the stock market has recovered swiftly.

Additional Reading: Wuhan Virus: How Does it Affect Your Stock Investment Portfolio?

I am writing this article to let you know that from the financial point of view, if you have done your part to organize your personal finance, save, insure and invest,  there is no reason for you to allow fear to rule your life.

It is reported a 25-minute recording of Minister Chan Chun Sing’s close door meeting was widely circulated. But if you had a chance to hear what he said, you would have more confidence that we are getting this over sooner.

There are really 3 things you should keep in mind now:

  1. Remain cautious and stay calm
  2. Avoid spreading or reacting to unsubstantiated rumours and hearsay
  3. Do not hesitate to seek help from people who can give you objective views

If you find it useful to your family friends, share this article. If you have more information to add, simply comment below so I can update it.

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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