Group Protection - Coronavirus Q&As

Business Continuity

Will services and service levels of both AIG and your third party providers for your add-on services remain the same?

We are very confident in the business continuity plans implemented by both AIG and our service providers and our ability to continue to provide the services offered. The only exception to this will be face-to-face interactions, which will be provided in line with Government advice on social distancing.

Are quotes for new business, or your ability to assume risk for new business, impacted?

Our approach is very much business as usual, with our business continuity plans fully implemented and operating effectively.

Is AIG still in a good position to pay claims?

We are very confident that we have the appropriate business continuity measures in place and that the current situation will have no impact on our ability to pay claims.

Claims

Will you cover employees who die from coronavirus?

Group Life schemes cover claims from all causes, so coronavirus is fully covered for insured employees. In an extreme scenario, if there are multiple deaths within one scheme, claim payments will be subject to our event limit clause (details below).

Will insured employees be covered if they die from coronavirus while travelling abroad?

Yes, as mentioned above, we cover death from all causes and so coronavirus is covered regardless of where the infection or death occurs.

If an employer has temporarily ceased pension scheme contributions because of coronavirus, what will you do in respect of Group Income Protection claims which have pension scheme contributions insured?

For both existing and new claims we will not pay pension scheme contributions whilst they are suspended, however when the pension scheme contributions are re-instated we would increase the benefit accordingly.

If a company that holds an AIG Group Income Protection policy ceased trading, would you continue to pay Group Income Protection claimants?

We will continue to pay all claims that we have already accepted whilst they remain valid. In addition, we will consider all claims where incapacity arose before the policy ceased, provided all premium payments are up to date.  In such cases we will make the following changes:

  • If the definition of incapacity was ‘own occupation’ it will change to ‘suited occupation'
  •  Any benefit in respect of National Insurance Contributions or pension scheme contributions will cease immediately
  • Income tax will be deducted
  • Benefit will cease if the former employee takes up residence outside the UK, Channel Islands or Isle of Man
  • Benefit payments will cease in the usual way, as detailed in the policy terms and conditions.

If a Group Income Protection claimant receives a letter from the Government identifying them as being extremely vulnerable and advising them to shield for 12 weeks, will this impact the claim?

This will not impact an existing claim or be taken into account as part of our assessment of a new claim. The claim will continue to be assessed in line with the policy terms and conditions.

Can an employee who has been furloughed1 and then becomes sick make a Group Income Protection claim? If so, when will the benefit be paid from? What happens if an employee who is off sick and serving their deferred period is furloughed?

A Group Income Protection claim can be made for an employee who has been furloughed. If an employee who has been furloughed becomes unable to work due to illness or injury the deferred period would start from the date they became incapacitated.  The benefit payments will become payable on the later of:

  1. The end of the deferred period
  2. The day the furloughed period ends.

Will you continue to pay Group Income Protection benefit to claimants who are furloughed?

If an employer furloughed a current Group Income Protection claimant, we would expect the employer to make a claim against the Coronavirus Job Retention Scheme (CJRS). In such cases, we would then reduce the benefit we pay by the amount of the relevant furlough payment.

Catastrophic Event Clause

Could the coronavirus trigger the catastrophic event clause?

Deaths from coronavirus would potentially be considered an “event” for the purposes of defining a catastrophe and applying limits to claims. Event limits are location and scheme specific and detailed on each client’s policy schedule.

Based on the current UK data we are a long way from a scenario whereby an employer has a large number of deaths within their workforce where the event limit might become relevant.

What is your full formal definition of a catastrophic event?

A single event is defined as one originating cause, event or occurrence or a series of related originating causes, events or occurrences, resulting in the death of more than one member (insured employee), irrespective of the period of time or area over which such originating causes, events or occurrences take place and irrespective of the period of time over which such deaths occur. Originating causes, events and occurrences include, but will not be limited to:

  • War (whether declared or not);
  • Terrorist activities;
  • Earthquakes;
  • Windstorm;
  • Flood;
  • Sudden release of atomic energy or nuclear radiation;
  • Radioactive contamination (whether controlled or uncontrolled);
  • Biological or chemical substances;
  • Pandemic illnesses.

Are there any time limits which would apply to deaths due to a catastrophe?

No time limits are applied. Claims will be paid in the order they are received up until such point as the limit is breached.

Other than the event limit and travel limit clauses, are there any other restrictions on the cover?

No, there are no other restrictions on the cover, subject to any scheme specific exclusions or limitations set out in the client’s policy schedule.

How will you impose event limits when the death certificate is not required?

The claim form asks for the cause of death and this will be used to identify deaths due to coronavirus. GPs have been advised to state coronavirus as a cause of death where appropriate.

Policy Terms

Is coronavirus considered a critical illness?

No. The virus is not a named critical illness on our schemes and therefore would not be a valid reason for claim under our Group Critical Illness policies. However, if complications of the coronavirus resulted in an insured illness (e.g. kidney failure, liver failure, heart failure or respiratory failure) a claim could be made, subject to the policy terms and conditions.

Would you consider coronavirus as a related condition in respect of a Group Critical Illness claim for another condition?

No, we wouldn’t consider coronavirus to be a related medical condition for the purposes of Group Critical Illness cover.

What about the impact on travel, do your policy terms require clients to adhere to Foreign Office (FCO) travel guidance?

No. Prior to the policy commencing, we will ask the employer to tell us about any business travel to a small list of high-risk countries. These will be detailed when the quote or rate review is obtained. Once that information has been provided, insured employees will be covered wherever they travel in the world. If they subsequently travel to one of the high-risk countries, they will still be covered provided we were notified prior to the scheme starting, or at the last rate review, or if the travel was unforeseen at the time we asked about it.

If an insured employee is absent from work due to coronavirus for a prolonged period and is entitled to Group Income Protection benefits, would they be covered?

Yes. Income protection payments are made payable provided an insured employee has been absent from work for the deferred period and meets the definition of disability applicable to the scheme.

If the insured employee is self-isolating but does not have coronavirus symptoms, then they would not meet the definition of incapacity. However, if they have coronavirus symptoms, or are diagnosed, then the deferred period would start from the date they first had symptoms and were not able to work. We would not expect coronavirus to be an extended illness in the vast majority of cases.

Will you alter your approach to flexible benefits schemes?

We will allow a flexible benefits window to be open for up to two months, with deferment of a flexible benefit window for up to six months. The flex premium will be adjusted at the next data refresh following the deferred flex window.

In line with HMRC guidelines, we will consider the coronavirus pandemic as a lifestyle event for the purposes of flexing down only. Standard policy terms and conditions continue to apply, including limitations on the number of flex steps allowed in a 12-month period.

My client has an existing Group Life policy and would like to add the option for Group Life following redundancy for their insured employees. Is that possible?

Yes, subject to our usual requirements.

In respect of medical underwriting would you extend the period of temporary cover if there is a delay in obtaining medical information?

Where additional information is needed (e.g. medical information) and there are difficulties in obtaining it, we will make a decision using the information we already have wherever possible. If necessary we will extend the period of temporary cover for up to three months – this will be agreed on a case-by-case basis.

How does your actively at work (AAW) definition apply for coronavirus?

For Group Life and Group Critical Illness:
We will consider an individual as not being AAW if they have been diagnosed with coronavirus as a result of a positive medical test for the virus and are unable to work as a result.

We will consider an individual as AAW in the following scenarios, as long as they have not been diagnosed with coronavirus as a result of a positive medical test for the virus and are otherwise able to work:

  • If an individual is absent from work because they are shielding. By shielding, we mean the individual or a member of their household meets the Government’s definition of clinically extremely vulnerable to coronavirus because of an underlying health condition
  • If an individual is self-isolating either because they have potentially been exposed to coronavirus or they are experiencing symptoms of coronavirus
  • If an individual is not working because their place of work is closed as a result of the restrictions imposed by the Government as a result of coronavirus and they are unable to work from home
  • If an individual has been furloughed as a result of coronavirus.

For Group Income Protection:
Our standard AAW definition will continue to apply.

For full definitions of Actively at Work, and the circumstances in which it applies, please refer to your client’s policy wording.

In respect of coronavirus, what are your requirements for Group Life quotes and application absence disclosures? Will the same approach apply to rate review?

Our requirements (which are dependent on scheme size) remain unchanged. Alongside absences for other reasons, you must tell us of any individual who has been diagnosed with coronavirus and is absent from work as a result.

Please note that we do not need to be notified in the following situations:

  • If an individual is absent from work because they are shielding. By shielding, we mean the individual or a member of their household meets the Government’s definition of clinically extremely vulnerable to coronavirus because of an underlying health condition
  • If an individual is self-isolating either because they have potentially been exposed to coronavirus, or they are experiencing symptoms of coronavirus
  • If an individual is not working because their place of work is closed due to coronavirus restrictions on working imposed by the government, and they are unable to work from home
  • If an individual has been furloughed as a result of coronavirus.

The same approach will apply to rate reviews.

Policy administration

Will you remove the requirement for wet signatures?

For application forms:

Yes. For application forms we will accept an eSignature (for example using DocuSign). We would also accept a typed signature supported by an email from the client.

For other forms:

For other forms, including claim forms, we will adopt the same approach where possible. In certain situations, the medical profession may require a wet signature. We will monitor this as it evolves and work with doctors to propose reasonable solutions such as verbal consent.

In respect of the AIG Life Excepted Life Trust, the law requires certain formalities to be observed in order to validly execute a deed. We would accept a trust completed electronically by the client, with details of the authorised signatories who would normally sign, or execute, the deed, together with the other information required to be completed on the deed. As soon as it is possible, we will require a wet signature version of the executed Excepted Life Trust deed, where the effective date reflects that of the electronically completed version already provided. We will contact you with further details of the Excepted Life Trust process if relevant to you and your clients.

Will you continue to allow policy changes to be made e.g. increase in benefit basis?

Yes, subject to our usual requirements.

What happens if my client can’t submit claims forms in a timely manner?

To start the claims process we need to have completed claim form – we accept electronically signed or scanned documents, which include the image of a wet signature. Where additional information is needed (e.g. medical information) and there are difficulties in obtaining it, we will make a decision using the information we already have wherever possible. This may include agreeing to temporarily pay a Group Income Protection claim on a discretionary basis, subject to appropriate terms, until the medical information is available for us to make a final decision.

Do you expect there to be any changes under the temporary absence provisions, across policies/benefits, in respect of the timeframe or allowances for salary increases during absence?

No, our current terms and conditions will continue to apply.

Financial Support

Due to the financial impact of coronavirus on companies will you be allowing a ‘policy holiday’ i.e. suspension of the policy for a period of time, allowing it be re-instated at a later date?

A ‘policy holiday’ or suspension is not something that is covered by the policy terms and conditions. Schemes of up to 50 lives have the option to defer premiums for a limited period; please refer to full details in the ‘premium deferral’ section below.

You can cancel the policy, however once the policy is cancelled we will not consider any claims. However depending on the contracts of employment your client has with employees, they may still be liable to pay a benefit if one of their employees suffers an event that would otherwise mean you making a claim to us. We strongly recommend that your clients seeks the appropriate advice before cancelling the policy and we expect them to tell their employees that the cover has been cancelled.

Your client will need to write to us telling us that they are cancelling the policy due to the financial impact of coronavirus on their company.

If you ask us to insure a scheme again within six months of cancelling the policy we will do so on the following terms:

  • No absentee requirements for Group Life
  • Actively-at-work for Group Income Protection
  • No additional requirements for Group Critical Illness i.e. the pre-existing conditions exclusion and related conditions exclusions aren’t re-started for members who were covered at the time the policy was cancelled.

If we insure the scheme again within six months, the previous rates and policy terms and conditions will apply unless a rate review would have occurred during that time. If a rate review would have occurred during that period, we will need the rate review disclosures at the time we are asked to insure the scheme again.

Can clients switch from annual premiums to monthly or quarterly premiums?

Yes, at the next policy renewal date.

Where eligibility for cover is linked to pension scheme membership, if an employer and/or insured employee stops pension scheme contributions temporarily due to coronavirus, will insured employees still be covered?

Yes, providing they are still considered an insured employee we will continue to provide cover for up to six months. We will need written confirmation from the client confirming the steps that have been taken and that this was as a consequence of coronavirus.

Premium deferral

The following Q&As apply to all AIG group protection policyholders with less than 50 employees.

Will you offer a premium deferral option for clients who are facing financial difficulties due to the coronavirus pandemic?

Yes, all businesses insured with AIG with up to 50 employees can request that monthly or quarterly premiums are deferred for 1-3 months.

How can a client request a premium deferral?

AIG will require a written instruction from either the adviser or client to request a premium deferral. We will write to confirm the request has been granted, and will defer the direct debit collection for the requested period.

What happens at the end of the deferral period?

At the end of the deferral period, we will write to confirm that the next premium is due. The premium, together with arrears due for the deferral period, will then be collected automatically via direct debit.

What happens if any claims are submitted during the period when premiums are deferred?

We will consider a claim in the normal way and this will not be impacted by the premium deferral.

Will commission be paid while premiums are deferred?

No. Commission is paid when premiums are received, so commission payments will only resume when the premiums arrears are paid, and will then continue as usual when monthly/quarterly premiums are collected.

Is there a charge for deferring premiums?

No. There is no charge for making use of this premium flexibility.

Do you require any evidence when a premium deferral request is made to confirm that the policyholder’s financial hardship has been caused by the coronavirus?

No evidence is required.

Can the option to defer premiums be used more than once?

No, this option can only be requested once.

Is there a closing date for this offer?

We will accept requests for premium deferrals until 31st October 2020 (inclusive). We will continue to review the closing date and provide further information as required.

Underwriting

Have you made any changes to your high-risk countries list since the outbreak of coronavirus?

Our underwriting philosophy for scheme underwriting remains unchanged at this time.

A small volume of Group Protection applications, which are above the automatic acceptance limit for a scheme, go through medical underwriting. Where an application goes through medical underwriting, travel to high-risk areas (as defined by the FCO), would be assessed individually based on the answers given to the application questions.

We continue to monitor the global situation and our philosophy is subject to change at short notice as the coronavirus outbreak changes.

Change to working circumstances

Will cover continue for workers on zero-hour contracts?

We cover workers on zero-hour contracts for Group Life and Group Critical Illness. Where cover is based on salary, workers on zero-hour contracts have to be in their own category with a suitable salary definition.

For members who are on a zero-hour contract, cover during periods of ill health will end on the earlier of:

  • The end of the contract in force when the member was first absent; or
  • When that contract is terminated; or
  • Three years from the start of the ill health.

For members who are zero-hour contract workers cover will end once they have not received earnings from the employer (for reasons other than ill health) for a period of six consecutive months.

For Group Income Protection, we don’t cover workers on zero-hour contracts.

If an employer moves their employees on to zero-hour contracts because of coronavirus would you still cover them?

If insured employees were moved on to a zero-hour contract this would be a change in the employment relationship. Given the support provided for employers by the Government we don’t expect this to happen often and would consider this on a case by case basis for Group Life and Group Critical Illness. For Group Income Protection we would not cover the employees who are moved on to zero-hour contracts.

Are members covered while working from home, in isolation or in quarantine?

Cover will continue for members while working from home, in isolation or in quarantine.

If insured employees are furloughed, or if they take or are forced to take a salary reduction because of coronavirus, will they continue to be covered by their Group Protection benefits?

Cover will continue to be provided under the temporary absence provisions of the policy.

  • For Group Life and Group Critical Illness, cover can be provided for up to three years providing they remain an employee and eligible for scheme membership. Cover will continue on their pre-furloughed salary.
  • For Group Income Protection, cover can be provided for up to one year providing they remain an employee and eligible for scheme membership. The benefit amount will be calculated in line with the policy terms and conditions. Each case will be treated on its individual merits.

Will cover continue for insured employees who are reservists in the military and are called up?

Yes, providing they remain an employee of the company and eligible for scheme membership they will be covered under the temporary absence provisions of the policy.

Will cover continue for insured employees who become an NHS volunteer or those that return to the NHS during this pandemic?

Yes, providing they remain an employee of the company and eligible for scheme membership.

Will cover continue for an employee who has been furloughed and goes to work for another employer on a temporary basis?

Yes, cover will continue under the temporary absence provisions providing they remain an employee and eligible for scheme membership.

 

1An employee who is not required to work and in respect of whom the employer can apply to the Government to temporarily cover part of their salary during the coronavirus pandemic who would otherwise have been laid off.