Some insurers have introduced new exclusions designed to reduce their exposure to Covid-19 claims risk and underwriting may be disrupted in some cases if insurers cannot access the normal checks they would conduct to assess risk.

Partners Life managing director Naomi Ballantyne said there were things advisers should think about before replacing any business at the moment.

“They should make sure they are fully aware of any Covid-related restrictions which apply to any new cover they are looking to replace existing cover with. Any such restrictions are likely to make it hard to justify moving in terms of ensuring the client’s best interests are met.

“Not all new cover offerings have Covid restrictions on them – it depends on the insurer and the types of cover so replacement business might still make sense as long as the adviser makes sure of the above before making any recommendations.

“There is increased risk to the client and, therefore the adviser, in today’s environment so our recommendation is they are careful.”

Gail Costa, chief executive at Cigna, said it was always a good idea to reassess cover to make sure it met a client’s needs but there was a lot of disruption in the market and people would need advice.

“All too often price is the key driver of replacement decisions, but there are many other things to consider aside from price. And now with Covid-19, there’ll be even more things to think about especially as insurers are seeing increased risks and making changes to their policies to reflect that.”

Russell Hutchinson, director of Chatswood Consulting, said not every insurer was applying exclusions. “AIA has just said at the moment there is no change to underwriting. It does depend on what you need.”

Asteron would ask more questions, he said, but had not actually changed its underwriting criteria.

Partners Life, Cigna and Fidelity had pulled back on redundancy cover sales. Partners Life is issuing no new loss of revenue cover or variable loss of revenue cover benefits, and no agreed value benefits based on income cover, mortgage repayment or household expenses benefits.

Disability benefits will have a restriction for disability arising when a life insured is unemployed and all new policies will have a six-month stand-down before clients can claim on premium holidays.

Hutchinson said few people would claim on life or income protection policies due to Covid-19. But how hard it would be to move a client would depend on what sort of cover they wanted. Redundancy benefits would be harder to replace and people who were self-employed might find income products tricky.

“The same applies in the current environment as always [for replacement business] – if you have someone with a pre-existing condition it’s probably not a great idea [to move them] but you can look around and see what terms you get.”