Life insurance companies are mandating a three-month waiting period for anybody infected with the Covid virus who wants to buy a term plan.
Companies are also demanding additional medical tests, including chest X-rays, depending on the severity of the infection and if hospitalization was required, to provide a term plan to persons who do not already have coverage.
“Insurance companies are requiring a one to a three-month postponement of a proposal for people infected with Covid who want to buy a term plan, depending on the severity of the infection and whether hospitalization was required,” said Sajja Praveen Chowdary, business head-term insurance at Policybazaar.com. “Companies may also want medical evidence such as chest X-rays before making a decision.”
The second wave of the Covid 19 outbreak last year established a trend that is now a full-fledged policy for all insurance companies. People who want to buy a term plan must complete a Covid disclosure form, which asks if the insurance buyer has been infected with the virus in the preceding 90 days, among other questions. Furthermore, test results are required depending on the severity of the infection.
“Not only is it difficult to find an insurance policy for a Covid patient, but we’re also seeing an influence on the amount of coverage available.” Before Covid, 40-year-olds could easily obtain a Rs 25 crore insurance policy, but now just a Rs 10 crore policy is accessible. The coverage would be even lower for people over 50. Because of their high risk of co-morbidity, corporations are now avoiding mediclaim policies for senior citizens and their parents.
Different insurers have established different criteria for determining whether or not Covid customers are eligible to purchase a term plan. For persons afflicted by Covid, IndiaFirst Life Insurance, for example, offers a 30-day to the six-month waiting period.
“We have a 30-day waiting time if a person is home isolated, but if he or she is home quarantined and has comorbidities, the waiting period might be 60 days. It could take up to six months for those who are more badly afflicted and require hospitalization “Rushabh opined.
Reinsurers have also imposed stiffer requirements for purchasing new term policies to limit their losses.
“Reinsurers have mandated that insurance companies have a moratorium period for those who have been infected since, while people may be healed, the disease may have side effects,” Chowdary explained.
The new rules could affect insurance demand at a time when rates are rising, as the Omnicron variation is spreading quickly and affecting more people, but to a lower extent than the second wave.
“It’s too early to tell whether this will affect demand, so we’ll have to wait and see,” Chowdary added. Due to the increase in Covid infections as a result of the Omnicron version, demand for term plans may be impacted.
Follow and connect with us on Facebook, LinkedIn & Twitter
