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