Does Term Life Insurance Policy Covers Death Due To Coronavirus?

Covid-19 cases are spiraling across the globe and India has become the second-worst hit country in terms of number of active cases and third-worst in case of fatalities. 

In these unprecedented times, it is all the more important to plan your future to make sure your family is financially safe if life throws uncertainties your way. If you are the sole bread earner of your family, it is always in the back of your mind to build a safety net for your family. Term insurance is a critical tool to protect you in such circumstances and should be on your priority list for securing the future of your loved ones.

Does Term Insurance Covers Death Due To Covid-19? 

The answer is yes. If an individual passes away due to Covid-19 and had a term life insurance policy, the nominee will get the sum assured as death benefit.  Death benefit is the sum assured payable by the insurer to the nominee/ beneficiary of the insured.  

However, if you are planning to buy a term life insurance policy now, you should keep in mind that insurers determine the premiums of your insurance policy based on medical history. 

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It is suggested to check your insurance policy thoroughly for any exclusions before buying to know the situations where they won’t be covered. 

Benefits Of Term Life Insurance 

Term life insurance offers comprehensive financial protection against unforeseen circumstances. Based on the insurance plan you buy, your family will receive the sum assured in your absence within the policy period. Buying a term plan becomes all the more important if you are the sole earning member of your family.

A term insurance plan helps in meeting the monthly expenses of your family when you are not around. The sum assured can also be used for your child’s education or marriage.  

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Higher sum assured at low premiums: Individuals get higher coverage in a term plan which is usually 10-15 times of their annual incomes. Also, the premiums are low and affordable. It is suggested to buy a term cover when you are young because the premiums will be very cheap. 

Premium remains locked for the entire policy term: The premium of term life insurance remains locked for the entire lifetime once you purchase your term insurance plan.

Covers critical illnesses: Along with life cover, a term plan offers protection against critical illness. This means the plan will offer lump sum payment if you are diagnosed with critical illness after buying the policy. These critical illnesses generally include cancer, paralysis, and heart attack.

Accidental death benefit: Many term plans provide accidental death benefit which is an added feature (commonly called rider) in which the nominee gets an additional amount apart from the sum assured in case the policyholder dies due to an accident. 

Protection against disability: Term plans also offer protection against permanent disability. A disability rider in your term plan promises a monthly income for a fixed tenure or lump sum payout on the occurrence of permanent disability.

Indians Searching Online For Insurance 

In India, people are gradually realizing the need to have insurance amidst the pandemic. Indian consumers are the second-most active in APAC in seeking insurance during COVID-19, according to a consumer survey done by Swiss Re. According to the survey, a whopping 62% Indian consumers have searched for new policies as compared to 46% of people in the Asia-Pacific market. 

One in five Indian consumers in Mumbai or Bangalore are feeling anxious and barely coping when it comes to their finances as a result of COVID-19, while a further eight percent are feeling overwhelmed and unable to cope. This total of 32% is the second highest of any APAC country surveyed behind Japan.

Almost two-third of Indian consumers showed the intention to buy insurance when contacted by insurers through phone, e-mail, text as compared to half of the respondents from the Asia Pacific market. 

Unlike other surveyed markets, Indian consumers said the flexibility to mix and match coverage was the most important feature when choosing an insurer, followed by the ability to process online. Processing policies online from start to finish is a top priority for more than half of the respondents from India when selecting an insurer. 70% of respondents from India look for faster claims processes and 65% look for flexible conditions like additional health-care providers added to the cover when it comes to future insurance policies.

(Article edited by Sunny Lamba)

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