For new life insurance policy, Covid-recovered people will now have to wait for 3 months

Image Source : PTI

For new life insurance policy, Covid-recovered people will now have to wait for 3 months

People who have recovered from coronavirus infection will have to wait for up to three months before they can take a new life insurance policy, with insurers making the waiting period requirement applicable for coronavirus cases like other ailments. As a standard practice, all life and health insurance companies require people to wait for a specific period with respect to certain ailments and diseases to gauge the risk before selling a policy.

This condition of waiting period for people who have recovered from coronavirus infection will be applicable only for life insurance policies. Industry experts said the waiting period for individuals, who have recovered from coronavirus infection, in order to take a new insurance policy has been implemented against the backdrop of high mortality rate related to coronavirus infection.

Reinsurers have asked insurance companies to bring coronavirus infection cases also under the standard waiting period norms as high mortality rates have impacted the reinsurance business. The waiting period is about one to three months, they added.

Reinsurance players provide the cover for insurance policies issued by insurers.

Sumit Bohra, President of the Insurance Brokers Association of India (IBAI), said Indian insurers do not have the capacity to write all these risks. So, most of the insurance policies that are above Rs 10-20 lakh are reinsured and the reinsurers want “good risk to come into the system” due to which the waiting period has been made applicable for coronavirus infection cases also, he noted.

“The term insurance plans are reinsured by the life insurance companies and given the last two years and the kind of experience that the industry has seen in terms of claims, this is a requirement that has been raised and put in place by the reinsurance companies. So we need to have this rule coming into force with immediate effect,” Karthik Raman, Product Head of Ageas Federal Life, said.

Raman said insurance companies already have the waiting period requirement for various other ailments and coronavirus infection is one more ailment added to that list.

“It is a standard practice to have a waiting period. It is not just our country, it is worldwide and COVID comes under this practice,” he said.

According to Bohra, coronavirus infection has also been included in the list of ailments where waiting period will be applicable since the mortality rate is high due to the infection.

“Previously, the mortality rate was less and there was acceptance for more risk. Any amount of premium is not good enough to pay the claims if the mortality rate is going to be high. With COVID, it is not like a simple cold or flu.

“It is damaging other parts/ organs of the body as well, especially the lungs. So, it is difficult to gauge the survival rate if a policy is being issued for a longer period of time,” Bohra said.

Yogesh Agarwal, Founder and CEO of Onsurity, said, “in our understanding, we have seen insurers asking for a one month kind of waiting period. It is part of a risk management strategy because of what had happened during the second COVID wave”.

Term life insurance products are driven not only by the insurers but by the reinsurers as well in the ecosystem.

“We have seen that reinsurers have not been able to do good business over the last one-and-a-half years since the COVID pandemic,” he said.

Agarwal said the waiting period condition for people who have recovered from coronavirus infection will be applicable only on life insurance policies, and not health. Also, it will be applicable to only new retail customers and the existing policyholders will not be impacted in any manner.

During 2020-21, the country’s largest life insurer LIC gave over Rs 442 crore as a reinsurance premium, up from Rs 327 crore in the previous fiscal. Private sector players together ceded Rs 3,909 crore as premium towards reinsurance, up from Rs 3,074 crore in the preceding financial year.

ALSO READ | ​Global economic growth likely to derail with COVID, inflation, income inequality: World Bank

Latest Business News

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Business News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechAzi is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More