Written by Vaidyanathan Ramani
The COVID-19 or coronavirus outbreak that began in China towards the end of last year has now become a global pandemic. Although it now appears to be slowing down in China, the spread of the disease is accelerating elsewhere. Coronavirus has caused over 375 deaths in India so far, with active cases touching the 11,000-mark. Governments all over the globe are reacting in ever more dramatic ways, closing borders, imposing lockdowns and travel restrictions, and the way the crisis will unfold from here is unknown. As the numbers increase rapidly, it is important to know how health and life insurance policies can come to your aid if you or your family members are tested positive for COVID-19? At the same time, it is also important to know how both these industries – health insurance and life insurance – are likely to shape up to the unfolding crisis and what long-term trends might the outbreak serve to usher in for the future.
Innovation in Insurance Plans
The Insurance Regulatory and Development Authority of India (IRDAI) has regularly put in efforts to make health insurance products more customer-friendly so that the customers can take maximum benefits of the insurance products purchased. During the COVID-19 crisis as well the regulatory body issued guidelines to all specialised health and general insurers that the claims related to the illness will be covered under the regular health plans and no insurer can deny treatment to the customers who have an active health insurance plan. Further, under the guidance of the IRDAI, some insurers are now taking next steps on product innovation by coming up with “need-based” products which have already debuted in this season.
Most of these COVID-19 based products are benefit-based where the benefit, equal to the sum insured, is paid on the occurrence of the event irrespective of the amount incurred. For the quarantined patients, the policy offers up to 50 per cent of the sum insured amount if it does not lead to a detection.
While these products offer a lump sum amount and can compensate for the loss of income during either the treatment of coronavirus infection or during quarantine at a medical facility, it is always recommended that one gets herself covered under a standard health insurance plan as it will provide cover for all other ailments (including COVID-19) as well for lifetime.
Expansion of Telemedical Process
Apart from the efforts put in by IRDAI, the insurers are also doing their best to ensure seamless support & services to their policyholders. In an innovative move, in view of the coronavirus outbreak leading to a lockdown across the country, the insurers have now expanded the usage of telemedical process in lieu of a physical medical test, for offering health and life insurance to prospective buyers. Under this process, while buying an insurance plan, the customers will be asked to provide some basic information about their health condition and are then scheduled for a telephone call with a company-appointed doctor. The conversations would revolve around the customer’s lifestyle with interspersed questions on her physical health. Based on this discussion, the insurer takes a decision on the ‘well-being’ of the customer and can issue a health policy up to a maximum sum insured of Rs. 1 crore. On Term plans the limit is slightly higher, to the tune of Rs. 2 crores that can be bought through this process.
It’s great to note that the insurance industry has expanded the risk assessment process to include remote methods like Telemedical underwriting and Credit Bureau check which is now helping them navigate forward in these tough times. All prominent health and Life Insurance providers are offering this now in partnership with the online distribution channels. One can expect that this surge in usage of telemedical underwriting will continue forward as it has offered three key benefits under its ambit – (1) a strong underwriting tool for the insurers (2) improved customer convenience and (3) Recorded conversations on health & well-being that minimizes disputes
Expediting the Claim Process
Earlier this month, the Insurance Regulatory and Development Authority of India (IRDAI) issued guidelines for health insurers asking them to expedite the settlement of coronavirus related claims. The industry is not alien to handling a virus outbreak as there have been several cases in the past, notably Ebola, Zika and Nipah. As per existing standards and as per the guidelines issued by IRDAI, a standard health insurance policy (indemnity) covers all types of infections and anyone who is hospitalized for 24 hours as a result of the infection eligible for making a claim under the policy. Apart from hospitalization charges, most health insurance policies also cover both pre and post-hospitalisation expenses that account for some portion of tests, diagnostics and any medicines that are needed post-discharge from the hospital.
On a term life policy, the death of policyholder due to coronavirus infection will be honoured under the existing settlement clauses and the beneficiaries will be offered the entire sum assured as per the options laid out in the policy. The insurers have been advised by the regulatory body to closely monitor the claims arising from COVID-19 infection and to further expedite the processing of such claims. Moreover, in order to cater to queries of customers on insurance claims related to COVID-19, several prominent insurers, as well as web aggregators, have started dedicated helpline numbers. Early trends indicate that these helpline numbers are proving to be very useful with significant numbers of calls being received every day.
Increasing Demand in Insurance Buying
Expectedly, amidst the ongoing coronavirus pandemic, the demand for health insurance and life term policies has seen a huge rise over the last couple of weeks. With the growing number of COVID- 19 positive cases in the country, it seems that people have become more aware of the unforeseen risks triggering this sharp demand. As per insurers and web aggregators, there has been a growth of 20-30 per cent in the sale of health and term insurances in the last few weeks. In order to buy a policy online, customers can now also avail e-KYC services. e-KYC helps in the completion of KYC (know your customer) process digitally and thus eliminates the need for filling up physical forms as well as submission of physical documents. The main objective of e-KYC is to register the customer with the least amount of paperwork and in the shortest possible time. The service has thus turned to be a game-changer in times like these when the entire country is on a lockdown.
The author is the Head of Product and Innovations at Policybazaar.com. Views expressed are the author’s.
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