People who have recovered from Kovid will now have to wait for 3 months for a new life insurance policy
Those who have recovered from a coronavirus infection will have to wait for three months before taking a new life insurance policy, with insurers enforcing the waiting period requirement for coronavirus cases like other illnesses. As a standard practice, all life and health insurance companies require people to wait a specific period of time with respect to certain illnesses and diseases to assess risk before selling a policy.
This condition of waiting period will be applicable only on life insurance policies for people who have recovered from corona virus infection. Industry experts said the waiting period for individuals who have recovered from coronavirus infection to take out a new insurance policy has been enforced against the backdrop of high mortality rates related to coronavirus infection.
Reinsurers have also asked insurers to bring cases of coronavirus infection under standard waiting period norms as the high mortality rate has hit the reinsurance business. He said the waiting period is around one to three months.
Reinsurance players provide cover for insurance policies issued by insurers.
Insurance Brokers Association of India (IBAI) President Sumit Bohra said that Indian insurance companies do not have the capacity to write off all these risks. Hence, most of the insurance policies above Rs 10-20 lakh are reinsured and reinsurers want “good exposure to get into the system”, due to which waiting period has been imposed even for cases of coronavirus infection, he said. .
“Term insurance plans are reinsured by life insurance companies and looking at the last two years and the kind of experience the industry has seen in terms of claims, this is a requirement that has been picked up and placed by the reinsurance companies. Hence we This rule needs to be implemented with immediate effect,” said Karthik Raman, Product Head, Ageas Federal Life.
Raman said insurance companies already require waiting periods for many other diseases and coronavirus infection is another disease on that list.
“Having a waiting period is a standard practice. It’s not just our country, it’s all over the world and COVID comes under this practice,” he said.
According to Bohra, corona virus infection has also been included in the list of diseases where waiting period will be applicable due to high mortality rate due to infection.
“Earlier, the mortality rate was low and there was an acceptance for higher risk. If the mortality rate is going to be high then no amount of premium is enough to pay the claims. With COVID, it is like a common cold or flu. Not like.
“It is also causing damage to other body parts/organs, especially the lungs. Hence, it is difficult to estimate the survival rate if the policy is being issued for a longer period,” Bohra said.
Yogesh Agarwal, Founder and CEO, Onsurity said, “In our understanding, we have seen insurance companies asking for a waiting period of one month. This is part of a risk management strategy because of what happened during the second COVID wave. “
Term life insurance products are driven in the ecosystem not only by the insurers but also by the reinsurers.
“We have seen that reinsurers have not been able to do good business in the last one and a half years since the Covid pandemic,” he said.
Agarwal said that the condition of waiting period for people who have recovered from corona virus infection will be applicable only on life insurance policies and not on health. Also, it will be applicable to new retail customers only and existing policyholders will not be affected in any way.
During 2020-21, the country’s largest life insurer LIC paid Rs 442 crore as reinsurance premium, up from Rs 327 crore in the previous financial year. Overall, the private sector companies paid a premium of Rs 3,909 crore as reinsurance, up from Rs 3,074 crore in the previous fiscal.
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