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Are COVID-19 Recovered Patients Eligible for Buying Life insurance?

dateKnowledge Centre Team dateMay 24, 2021 views237 Views
COVID-19 Survivors buy Life Insurance | Eligibility for buying Life Insurance | Coronavirus

The life insurance industry has experienced resurgence since the outbreak of the COVID-19 pandemic in the country. Globally, there have been 15, 72, 89,118 confirmed cases of coronavirus, reported till the 9th May, 2021.

Customers have been buying term life insurance in record numbers in the last eight months, just as thousands of Indians have tested positive for the novel Coronavirus. Given the primary goal of term life insurance, which is to have financial security, the outcome seems rational.

According to the National Sample Survey conducted in the year 2018, there are about 80.9% people in the urban areas who do not have any health insurance. While, in the rural area, this percentage is about 85.9%.

Eligibility Criteria for Recovered COVID-19 Patients to Buy a Life Insurance

Despite the high number of deaths in the world, most people recover from COVID-19 with a little treatment and medicine. COVID-19 patients who want to purchase health insurance plan immediately after their recovery will be unable to do so. For a limited time, most health insurance companies in India have agreed not to offer health benefits to COVID-19 patients who have recently recovered. They've implemented strict underwriting guidelines for candidates who have recently recovered from COVID-19, including a cooling-off time.

The insurers' lack of knowledge about the long-term effects of coronavirus on recovering patients is the cause for the cooling-off time. Coronavirus is considered to have a long-term negative effect on the patient's major organs, such as the lungs and heart.

In most cases, the level of coverage in a life insurance contract is substantial. When an insurance company offers so many expensive plans, it will find it difficult to honour premiums later if a significant number of customers are affected post-covid.

The extent of the effects on the patient's body, though, is still unknown to the medical community. In this second phase of the COVID-19 pandemic, medical researchers are also discovering the latest effects of coronavirus on recovering patients.

A parallel mandate is being followed by many other health insurers. In the non-life insurance market, the delay time varies from company to company, ranging from 15 to 90 days.

Survivors of COVID-19 may have to Wait for Buying Life Cover

According to statutory rules, insurers are not permitted to add claim-based loadings while renewing an individual health insurance plan. Only the benefits that were added when the policy was first purchased would be extended.

  • Individuals with a history of coronavirus do not have to pay a higher premium, except for price fluctuations related to increase in age slabs and medical inflation, which in India is in the region of 10-12 percent each year.
  • It is medically proven that Covid-19 has a longer-term effect on humans and renders them more vulnerable to hospital treatment with side effects. The incidence assumption is invalidated.
  • However, not all insurers support a cooling-off time. A few insurance companies are offering COVID-19 recovered patients health insurance plans with no waiting time. They are able to consider health care proposal applications from people who were diagnosed with COVID-19 soon after they recovered.

Since insurance providers do not enforce claims-based loadings, anyone who was COVID positive at some point in time will have the same experience purchasing or renewing a health insurance policy.

The rate will be calculated based on the existing age-based rates that have already been filed with the insurance providers. The renewal fee is determined based on the insured's maturity, and the insured must pay it to renew.

Is Diagnosis Report Required from COVID-19 Patients to Buy a Life Cover?

Whether or not there is a cooling-off time, all COVID-19 recovered applicants must provide their medical records on the proposal form. The failure to disclose a COVID-19 diagnosis or to include information about pre-existing conditions could result in the proposal form being rejected.

Understand why should you inform your life insurer about contracting COVID-19?

Hence, the new insurance policyholders have to be very particular about their diagnosis, whereas the insurance companies employ stricter screening processes for insurance claims.

Many extensive guidelines are becoming important in case of COVID-related infections, and insurers have expanded monitoring to detect those diseases before issuing policy changes. Some of these guidelines are:

  • COVID-19 patients who have recently recovered will be required to send a COVID-19 negative report as well as a hospital discharge summary (if admitted) to the insurer as evidence. If more information is required, the insurer can contact the claimant.
  • Before receiving a health care contract, COVID-19 rescued applicants will be required to complete a series of medical examinations.
  • Applicants are usually required to receive pre-policy diagnostic examinations depending on their age, pre-existing disabilities, and other factors.
  • COVID-19 recovered claimants, on the other hand, would be required to perform detailed diagnostic examinations so that the insurer will assess their fitness.

To sum up, fully recovered COVID-19 patients can apply for life insurance. Insurers are requesting new assessments in order to define and analyse the risk category of claimants in both life and health insurance policies.

If a Covid patient reports negative after three months of recovery, the odds of regression are reduced, and the allegations are less likely to be challenged. Many individuals who have overcome the coronavirus do not have coverage or have a policy that is insufficient.

Learn how a life insurance can restructure your life post-COVID-19.

These customers can purchase a new insurance policy and may need to be aware of the new regulations. Increased scrutiny and waiting periods are likely to be the rule with insurers before their immunity against the coronavirus is established

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Frequently Asked Questions (FAQs) for Life Insurance

The premium is one of the most important factors to consider before buying a policy. Many people buy a life insurance policy with a high sum assured but are unable to process the premiums for the entire premium payment tenure. You can get a better idea of the premium outgo with the premium calculator available in the 'Tools and Calculator' section of www.canarahsbclife.com.

Life insurance plans come with several riders which increase the efficiency of the policy for the buyer. For instance, if you have a history of terminal illness in your family it would be advisable to opt for terminal illness rider with your term insurance. Riders or add-ons help in customising the standard policy benefits for the requirement of different families. The iSelect term insurance plan comes with a built-in cover for terminal illness, and option for protection against accidental death or disability. You can also opt to cover your spouse's life under the same policy by paying an additional premium.

Insurance companies calculate the premiums based on several factors such as age, gender and occupation.

Age:It is one of the biggest factors that influence life insurance premiums. Premiums tend to be low when the life insured is younger as the chances of contracting diseases is low. Young people also opt for policies with longer tenures and pay premiums for a longer duration, which makes the policy cheaper for young people.

Gender:The insurance premium for women is generally lower when it comes to life insurance plans. Women live longer and pose a lesser risk of a claim leading to lower premiums for them.

Lifestyle habits:The premiums for people who smoke or drink is always higher due to higher health risks.

Policy term:Policy terms are also taken into consideration by insurers while deciding the premium amount. Policies with longer tenure are cheaper as compared to short-duration policies.

Mode of purchase: The platform that you use to buy the policy also determines how much you will have to pay for the plan. People who buy life insurance policies online have to pay lower premiums as compared to offline policies.

Occupation:The nature of your work is an important factor that influences the premium amount. Certain occupations like shipping and mining are considered more dangerous as compared to jobs in services industries. The insurance premium rises with the risk profile.

Processing life insurance claim is a transparent and smooth process with Canara HSBC Oriental Bank of Commerce Life Insurance.

In case of the death of the life insured, the nominee will have to intimate the company by filling a Death Claim Form and sending it to the nearest branch office.

Once the form is received, the claim is registered by the insurer.

After the registration of the claim, the company will send the claims pack along with the related forms such as physicianâ s statement form and employer certificate that need to be filled.

Along with the duly filled forms a few documents such as original [policy document, death certificate, copy of bank passbook, hospital or treatment records, photo identification and address proof have to be provided.

The claim is processed on the submission of relevant documents. Once the documents are verified, the claim amount is released post all due diligence.

Household expenses rise with age. The cost of children's education increases along with other lifestyle expenses. The iSelect term plan offers an option to increase the cover according to the life stage. If opted, the insurance cover increases by 25% at every 5-year terminal till the 20th policy year.

Even though a life insurance policy is bought to protect your family in your absence. There are chances of the claim being rejected due to several factors.

False information: If the policyholder provides false information or conceals important information while buying the policy, the insurer has the right to reject the claim after his/her death.

Type of death: Deaths due to suicide in first policy year, intoxication or pre-existing disease is not covered under life insurance.

Premium payment: The payment of premiums on time is of utmost important to avail the benefits of life insurance. Life insurance policy may lapse on the failure to pay the premiums

Nominee details: An insurance company can put the claim on hold if the nominee details have not been filled or not been updated by the policyholder.

Suicide: If the life insured commits suicide within 12 months of buying the policy, the insurance companies generally pay 80% of the total premiums paid.

Buying life insurance online is not only safe but a better option. Online life insurance policies have lower premiums and the individual is not required to visit the insurer's branch or a bank. Online insurance policies also offer higher benefits. Customers should, however, buy online policies only from credible insurers and should check for SSL certificate on the website to ensure that the website is legitimate.

The cost of life insurance policies varies depending on factors like age, gender and occupation. The average cost of life insurance plans, especially term plans, is very low compared to the amount of coverage offered.

An individual is allowed to have multiple life insurance policies. People opt for more than one policy to increase the cover or avoid claim rejection. In case of multiple policies, even if the claim is rejected by one insurer, the beneficiaries may receive the benefit from a different insurer.

Life insurance policies are of different types. In the case of unit-linked or endowment policies the policyholder receives the maturity benefit at the end of the policy term. However, in the case of term insurance plans, there are no maturity benefits. The death benefit is only paid out after the death of the life insured.

When you buy life insurance, the insurance company asks for the nominee details. Only the person named as the nominee in the policy can cash out a life insurance policy in case of death of life insured.

A life insurance policy is generally taken for a specified period. After the policy duration of a term plan gets over, the policy simply terminates and ceases to exist. However, in the case of unit-linked plans or endowment, you can use the policy as a tool for retirement planning and the accumulated corpus is used by the insurer to pay you monthly amounts for your entire life.

If a policyholder purchases a term plan for 25 years and dies during the policy term. The family receives the death benefit. In the case of iSelect term plan, the policy provides four payment options to the beneficiaries. If the regular payment options are chosen the policy works as a source of regular income.

It is a popular misconception that life insurance is only for accidental deaths. A term life insurance plan like iSelect also covers terminal disease along with death. A terminal illness cover is important as health insurance pays only for the cost of treatment and hospitalization, but a terminal illness cover pays you a lump-sum amount which takes care of other expenses. On the other hand, unit-linked policies such as Invest 4G cover death and also provide decent returns for other financial goals such as buying a house of child's education.

It is ideal to buy life insurance in your early 20s because it’s is the time when people have just started with their professional life and so there are lesser responsibilities and financial liabilities to take care of. Also, if you buy life insurance at this age, you will be paying relatively lower insurance premiums since it’s a due fact that mortality rate in case of young people is low. And that is why insurance companies offer lesser premium rates to younger people as they think that they are most likely to be fit and healthier with less chances of filing a claim in future.

Once you have cancelled your life insurance policy, you will instantly lose your life insurance cover. Afterwards, your insurance company will get in touch with you and ask for valid reasons regarding the cancellation of your policy. In case you cancel your life insurance policy within the grace period, i.e. 15 to 30 days, depending on your insurer, then insurance company will reimburse the premium amount paid by you. But, no refunds will be paid to you if the policy is cancelled after the grace period.

Yes, you can take life insurance under Married Women’s Property (MWP) Act, 1984 only if you are a married man and a resident of India. Buying a life insurance plan under MWP Act would be helpful in saving your family’s financial well-being when you are not around. As per this policy, only wife and children would be eligible to receive the death benefits. You can also buy a policy if you are a widower or a divorcee. However, in that case, you can give your child’s name as your beneficiary. It is very simple to buy a life plan under MWP Act. All you need to do is to fill up an MWP addendum while purchasing an insurance policy.

Yes, there are different payment options for you to pay premiums. Here’re some of them

    1. Regular premium payment option – This premium payment option allows you to pay premiums equal to your policy term either monthly, quarterly, half yearly or annually.

    2. Single payment option – Through this premium payment option, you can pay the lump-sum amount in one single payment.

    3. Limited payment option -In this premium payment option, you can pay premiums for a specific period of time less than policy term either monthly, quarterly, half yearly or annually, but benefits of insurance can be enjoyed for a longer period of time.

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