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Does your Health and Life Insurance cover for Treatment and Deaths due to COVID-19(Coronavirus)

*Always read your insurance documents carefully

Does your Insurance cover for due to COVID-19?

On 11th March the WHO declared COVID-19 outbreak as a pandemic so health insurance may not cover the expense.IRDAI has urged insurance companies to come up with COVID-19 specific health plans

Better Safe Than Sorry

With the rapid spread of coronavirus (COVID-19) the World Health Organisation (WHO) has declared it as a global pandemic, an illness that has spread far and wide.

With over 10,33,478 Confirmed cases and 54,369 deaths worldwide the virus is on top of everyone’s mind now.

There is a huge concern now over the costs of treatment and hospitalisation, and whether life and health  insurance will cover it.

On 4th March The monitoring authority Insurance Regulatory and Development Authority of India (IRDAI) issued a circular notifying insurers who cover coronavirus under their policies should ensure that the claims are handled efficiently and costs are settled as per applicable norms.All expenses incurred during the course of treatment, including during the quarantine period, shall be covered by all insurers. 

However, On 11th March coronavirus was declared a pandemic by the WHO,So health insurance may not cover the expenses.

How do norms of health insurance change during a pandemic?

Does your Health and Life Insurance Cover for COVID-19

According to WHO , a pandemic is the worldwide spread of a new disease.

The 2009 H1N1 flu was the most recent pandemic prior to coronavirus and it killed hundreds of thousands of people globally

“In case WHO declares Covid-19 as a pandemic and the same is ratified by the government of India, in some of the insurance plans, exclusion for global pandemic will get triggered, after which you may not get the cover,” said Pankaj Verma, head, market underwriting operation, SBI General Insurance Co. Ltd.

Rakesh Goyal, director, Probus Insurance, an insurtech broking company, said that as long as coronavirus is not declared a pandemic, health insurers are liable to cover the policyholders. “The moment coronavirus is declared a pandemic, policyholders who may get diagnosed with the disease will have to pay out of their pocket to cover medical expenses, as such claims are not covered under most health policies,”

Stil it is suggested that one must check about it individually with his/her insurance company individually as it also depends on how the company has filed its products with the regulators.

IRDAI, through its notification, has requested insurers to design coronavirus-specific policies. In line with which, Digit Insurance,launched a well defined health policy for coronavirus. Under which, policyholders get the full sum insured on being tested positive for the disease after which the policy terminates.

SBI General Insurance, Edelweiss General Insurance and Bajaj Allianz General have said that they will cover expenses against the treatment of Covid though it has turned a pandemic

Are deaths due to coronavirus covered by life insurance policies?

In the case of an individual who passed away due to the coronavirus, the nominee of the policy will get the sum assured as the death benefit.

“If the deceased person had a life insurance policy, then the nominee or the beneficiary nominee must know that the death caused by health-related issues are generally covered under a life insurance policy including term insurance,Existing life insurance policyholders are covered. While some life insurance policies have exclusions for a specific cause of death, coronavirus will be covered if you already have an existing life insurance policy” says Santosh Agarwal, Chief Business Officer, Life Insurance, Policybazaar.com.

Which means that when the insured person dies, the death benefit will be  paid to the nominee or the beneficiary nominee after a valid life insurance claim ha been filed.

Normally, life insurance policies don’t explicitly deny payment of benefit for deaths caused by any illness. However, you need to consider the conditions of the life insurance policy add-ons, whose benefits will be paid out only if those conditions are adhered to.

For instance, for life insurance policies with critical illness benefits, claims may not be entertained in an instance where medical advice was not adhered to/by the policyholder

For example, one term plan says it will not pay the critical illness benefit where the critical illness is caused directly or indirectly by any of the listed critical illness conditions where death occurs within 30 days of the diagnosis.

This, however, should not interfere with the payment of the basic sum assured on the term insurance policy

If you get a policy now, will it cover COVID-19?

If you are planning on getting a life insurance policy now, then you should note that insurers determine the premiums of a policy on the basis of your health and medical history.

Hence, it’s rational to assume that a global health crisis like the coronavirus would have an impact on your policy acceptance and premiums, if you are currently in the application process stage.

If your life insurance policy application is in process, the insurer may hold or even reject the policy if you have already contracted the coronavirus infection,

However,As long as the policyholder has disclosed all details correctly at the time of buying the life insurance policy, wherein the person was not infected with coronavirus, the death benefit claim would be payable even if it arises due to death from coronavirus infection afterwards

Insurance plans launched during COVID-19

Digit Insurance For COVID-19

New-age health insurers have been interested in providing insurance for the pandemic to capture the market. One of the key player is Digit Insurance

Digit Insurance launched a product for Coronavirus(COVID-19) that covers both positive and quarantined cases, offering coverage from ₹25,000-₹2 lakh. The insurer has said that it will not exclude cover for Covid or any other pandemic under its existing health product (Digit Health Care Plus) or its new Covid product.

However, It’s important to note that 

  • Digit Insurance will pay 100% for the positive cases, it will offer only 50% of the sum insured for quarantined cases. 
  • The policy states that for being eligible, the insured should not have been in contact with someone with a suspected history of the coronavirus disease till the policy ends.
  • The insured or their immediate family members should not have travelled to China, Japan, Singapore, Thailand, Malaysia, Hong Kong, Macau, Italy, Iran, Behrain, Kuwait and Taiwan since December 1, 2019.
  • The insured should not be suffering from symptoms such as cough with or without sputum, cold/nasal block, fever with body pain or shortness of breath for the last six weeks, as these may be symptoms of the disease already contracted.

The product has a list of exclusions making it very specific. Consequently, it may not be a product that everyone will look forward to buying

This product sure has a lot of conditions to cover for the COVID pandemic so it’s safe to assume that one should be prepared to handle the condition with cash

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