Managing director Naomi Ballantyne said, while it would honour claims on those policies that already had redundancy benefits in place, it did not want to encourage people to start buying the cover in large numbers because they were fearful.
Coronavirus has affected economies around the world and New Zealand is expected to go into a recession this year.
Ballantyne said the impact of coronavirus was a non-quantifiable risk that could not be priced in so sales had been stopped for now.
Because it was quite an expensive option, there were not large numbers of customers with the cover, she said.
Ballantyne has also encouraged advisers to be careful about moving clients to new personal risk cover because each insurer is approaching the underwriting for coronavirus differently and clients could be left exposed.
She said brokers could talk to people about increasing their cover, or their options with their existing provider – “but be cautious about replacing existing benefits”.
Insurance commentator Russell Hutchinson said the impact on the insurance industry in New Zealand from coronavirus should be manageable.
Income protection policies would not be called upon significantly, he said, because most people would recover from coronavirus within the stand-down period for their claim to be paid.
While half of New Zealanders had life insurance, the death rate from coronavirus internationally had been highest among people aged 75 and over who usually had less insurance cover, he said.
Most people insured were aged between 35 and 55, he said, and the death rates among those age groups was very low – at about 0.4% in China.
If insurers calculated a likely pay-out based on 0.4% of the insured population’s sum insured that would be a “painful and deeply unpleasant” figure, he said, but it would not be insurer-killing.
“It’s a human tragedy but financially manageable. We are not talking about billions of dollars like we were with Christchurch.”
AIA said in a statement: "AIA New Zealand has not received any claims related to Covid-19, though we are beginning to receive questions from our policyholders about what CovidD-19 may mean for their insurance coverage.
"Customers can be assured that our insurance products do not contain any exclusions for pandemics, so as with any claim, policyholders would simply need to meet the eligibility criteria for the particular insurance benefits held through their policy."
