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Impact of Coronavirus on Life and Health Insurance Sector

Amid the spread of coronavirus various measures are being taken by the insurance players. COVID-19 has spread in more than 70 countries around the world and has led to lockdown in India. Due to the outbreak of coronavirus the need to buy health and life insurance has been realized by many as people want to ensure best medical treatment for themselves and their family members. While all the major industries and sectors are getting affected, let’s see how it has impacted the health and life insurance in India.

Impact of Coronavirus on Insurance in India:

The Insurance Regulatory and Development Authority of India has asked the insurance providers to offer coverage for issues arising due to the new Novel Coronavirus. And the impact on both life and health insurance is likely. Read on to find out-

How Coronavirus Health Insurance is Different from a Standard Health Insurance Policy?

Your basic health insurance policy also covers post-hospitalization expenses, but in the case of Coronavirus, the government of India is bearing the cost of check-ups and pre-hospitalization formalities, as the test of COVID-19 is free in government hospitals. But the hospitalization cost has to be borne by the patients and their family members.

Whereas in a normal health plan the insured pays for pre, post and in-hospitalization expenses including room rent, surgical procedures, doctor fees, ambulance costs, provided the hospitalization is for more than 24 hours.

Health Insurance

Amid the coronavirus, outbreak health insurance providers notice a marked jump in medical coverage related inquiries, with 30 to 40% more customers seeking coverage against the COVID-19 virus that has affected more than 96000 people in India and 4.71 million worldwide.

People with pre-existing medical conditions, low immunity cancer patients, diabetic patients, asthma patients are more at the risk of facing fatal consequences. While the nature of this virus still remains unpredictable as this is a new one and resistant to existing medications. Considering the severity of the conditions, the Insurance Regulatory Development Authority of India (IRDAI) has issued guidelines for insurance providers and has asked to include COVID-19 cases under the insurance plans. You can checkout health plans from top insurers and easily compare different plans for coronavirus health insurance on policy bazaar.

Even insurance start-ups like Digit health insurance have announced policies offering coverage to an individual with a sum assured option from Rs. 25,000 to Rs. 2 lakh. The insurer will pay 50% of the amount in lump sum on diagnoses and the remaining when quarantined in either a military or government hospital.

A lot of insurance providers are making customized plans to ensure coverage of the affected. Future Generali India Insurance has introduced a plan that offers coverage irrespective of the travel or medical history, and infants aged 1 day to a senior citizen up to 75 years of age are covered upon diagnosis from an approved lab.

Some insurance providers like Star Health Insurance are offering standalone health plans covering Coronavirus. Some insurance providers such as Max Bupa, Aditya Birla, Religare, etc, are also facilitating telemedical check-up facilities for the policyholders with intermediaries like policybazaar health insurance comparison portal.

Moreover, in the recent announcement by the Finance Minister, the New India Assurance will roll out Rs. 50 lakh under the tailor-made comprehensive personal accident cover for public health care providers in case of accidental death on contracting Covid-19. Coverage will be offered to 22.12 lakh private healthcare staff, public and community healthcare providers who are directly involved in the care of Covid-19 patients. It is valid for 90 days starting from March 30, 2020. And the premium usually ranges between Rs. 200 to Rs. 2500 only.

Life Insurance

A lot of people who have a life insurance cover have been wondering if the death of the insured will be covered under the existing life insurance plan. So, will your insurer compensate your family if you succumb to the coronavirus?

In an existing life insurance policy if an individual pass away due to COVID-19 then his/her nominees will be provided the policy sum insured as the death benefit. Here it is important for the nominee or the beneficiary to know that life insurance policies usually cover death related to medical conditions. It means that if the deceased person has a life insurance policy then his dependents will be given the policy amount on filing a claim with the insurer.

The death benefit is basically the sum assured amount that the insurance company is liable to pay to the insured's family in the case of his untimely demise during the policy term. While purchasing the policy the insurer asks the policyholder to mention the name of the nominee to whom the insurer will pay after his/her demise. The amount is mentioned in the policy documents. Some of the life insurance providers that are covering coronavirus related deaths are Max life insurance, Aditya Birla Sun Life Insurance, etc.

However, as per the recent IRDAI regulations, life insurance companies in India are also offering indemnity-based health insurance plans. They are basically medical insurance policies that recompense the insured for the actual hospitalization expenses that are incurred during the treatment i.e. upto the total sum assured.

And if you are thinking of getting a life insurance policy during this time, then you need to remember that the insurer will charge the premium based on your medical conditions and medical history. And there is no denying that pandemic like COVID-19, is likely to have some impact on your life insurance policy issuance and the premium amount.

In a Nutshell

Clearly, the spread of coronavirus has impacted our lives in many ways. But with insurance once does not need to worry about the hospitalization cost, as it is easier to avail treatment in one of the best hospitals. However, with hygiene and social distancing one can minimize the spread. But in case someone gets diagnosed with this new virus then both health and life insurance policies have you covered. The impact of coronavirus is visible in almost all the sectors, and insurance companies are also improvising and launching custom-made plans to cater to the needs of the customers, which is the need of the hour!