What does the coronavirus mean for your money?

AS THE killer coronavirus lands in Britain, some will be worrying about what might happen should they or a loved one get caught up in the outbreak.the chances of catching the virus remain small, with just a handful of Britons affected so far, so no need to panic. However, it is always worth making financial plans in case coronavirus, or any other serious illness, strikes your family.

TIME OFF WORK

Serious illness can damage your finances as well as your health, especially if it stops you working, as bills, living expenses, car costs and debt payments will roll in regardless.

Ian Sawyer, commercial director at Assuredfutures.co.uk, said everyone should plan ahead, as a serious condition such as stroke or cancer could force you out of the workplace for months, and possibly for good.

Anyone suspected of having the coronavirus obviously cannot go to work, to avoid infecting co-workers. “Unless you can operate solely from home in a quarantined room, this means taking a prolonged period off work,” Sawyer said.

Statutory sick pay may kick in after four days, but Sawyer said this almost certainly means a significant drop in income, as it pays just £94.25 a week, for 28 weeks.the Government has not announced any special aid for sufferers.

Check what sickness benefits your company offers, or whether it offers you income protection benefits, which will pay a tax-free replacement income until you are fit enough to return. “If concerned, investigate your personal entitlement sooner rather than later,” he said.

TAKE COVER

Regardless of the coronavirus, workers, and in particular the self-employed, should consider taking out income protection, a type of insurance sold by Aviva, Aegon, British Friendly, L&G, LV=, Royal London,vitality and others.

This can protect you against an income shock, whatever the illness: “The payments can be used to pay your mortgage, rent and associated lifestyle costs during a tough time.”

Do not confuse income protection with PPI, which was widely mis-sold by the big banks.

Instead, it is sold through independent financial advisers or brokers. “They can tell you how much cover you need, after taking into account your income, savings, outgoings and other sources of sick pay,” Sawyer said.

Emma Walker, chief marketing officer at insurance specialist Lifesearch, said life insurance should pay out if a policyholder dies from the coronavirus: “Similarly, income protection would pay out if you contracted the virus, until you are fit enough to return.”

However, not every form of protection policy would do so. Another type of protection called critical illness cover pays a tax-free lump sum if you suffer from one of a list of pre-defined illnesses, such as cancer, heart attack or stroke, but this will not include coronavirus. “Policies wouldn’t pay under the total permanent disability definition either, because there are no signs that the coronavirus causes long-term disability,” she said.

However,walker added, if the critical illness policy includes death benefit, this would pay out if the policyholder dies.

When you apply for a protection policy, your insurer may ask about travel. “If you are being investigated for coronavirus or travelled towuhan recently, your application is likely to be postponed,” she said.

TRAVEL TROUBLE

The coronavirus only strengthens the arguments in favour of taking out travel insurance as soon as you book your holiday.

A number of airlines have suspended flights to China, including British Airways and Virgin, while package holiday firms are rearranging trips. In this case, you would expect them to reimburse your costs or make different arrangements.

If you contract the coronavirus while away, you should call your travel insurer’s 24-hour emergency helpline. Chris Rolland, chief executive at specialist travel insurer Allclear said: “You will be covered for emergency medical expenses providing you were not travelling to a country after the Foreign and Commonwealth

Office (FCO) warned against ‘all but essential travel’.”

A good policy should cover any unused travel and accommodation costs if you have to cancel your trip or cut it short: “Again, this only applies if you booked before any

FCO travel warning,” he added.

You should contact your airline or travel company for a refund, or an amended trip: “Travel insurance only covers non-refundable expenses.”

Some may be wary of taking a cruise, with 3,700 passengers and crew quarantined on the Diamond Princess at Yokohama, Japan, and at least 247 testing positive.

Travelsupermarket.com expert Emma Grimster said if you have booked a cruise your insurer is unlikely to pay up if you have changed your mind due to the virus.

The coronavirus is not the only threat to your health or holiday. Insuring against potential financial threats is always a sensible move.

‘If you are being investigated for coronavirus or travelled to Wuhan, your application is likely to be postponed’