If you are planning to buy a term insurance plan during the pandemic, you might want to re-consider added eligibility criteria.
Especially, with insurance 2 topmost companies Max Life Insurance and Tata AIA Life. They have announced that the Covid-19 vaccine certificates are mandatory to buy a term insurance plan. It is going to be quite challenging for people to buy a term insurance plan after this new change in the insurance industry because soon, other insurance companies are likely to add the same rule.
Based on the update, Max Life Insurance will issue term covers to people who are 45 years old and above, with an added condition to provide final vaccination certificates with other necessary documents.
The other insurance company that is leading the list with an added rule is Tata AIA. There is no age bar in Tata AIA, this company will issue policies and will allow those individuals who have received their dose of vaccine.
The new condition of eligibility for new term policies is coming from the reinsurers such as Munich Re and Swiss Re. They are the biggest underwriters of risk for domestic insurance companies.
The Industry experts believe that it will be helpful to insurance companies in two ways:
“The logic is similar to how buying insurance is harder for, say, a long-time smoker. Insurance companies could operate under the assumption that those not getting access to vaccines after a certain period of time could be doing so because they don’t want to get vaccinated at all,”
said an industry expert.
Further to the discussion with the economic times, Tata AIA spokesperson said, “Our practices and policies reflect emerging realities. We continue to stay consumer-focused as well as prudent in our practices."
“To ensure the highest degree of financial protection to our policyholders, we ensure their interests are protected at all times", he added.
Contrary to the benefits to the insurers, a consumer awareness platform for insurance - Beshak.org's chief executive had expressed his concerns and said, “Even a single shot displays intent, and insurers should not penalize customers for not being able to access vaccines when there is a shortage.
This is a major concern for the majority of the population because there is a huge shortage of vaccination in India and this newly added condition for buying a term insurance plan can affect thousands of people who are in the need of an insurance plan at present.
As per the data so far, out of 1.38 billion citizens, only 23.28 crore had taken their first dose of the COVID-19 vaccine.