Amid the country’s third wave of Covid-19, people who have recovered from the deadly infection will have to wait a bit to get life insurance for themselves. Under the new rule, people who have recovered from a coronavirus infection will have to wait up to three months before they can take out a new life insurance policy. Indeed, several insurers have decided to make the waiting period requirement applicable for Covid cases like all other conditions.
Until now, insurance companies had the requirement for a waiting period for various ailments and coronavirus infection is one more ailment they have added to this list.
Industry experts told the PTI news agency that they had implemented the waiting period amid a high death rate from coronavirus infection.
Reinsurers have asked insurance companies to subject cases of coronavirus infection to standard waiting time norms as well, as high mortality rates have impacted reinsurance business.
Reinsurance players provide coverage for insurance policies issued by insurers.
Sumit Bohra, president of the Insurance Brokers Association of India (IBAI), said Indian insurers cannot cover all these risks. Thus, most of the above insurance policies ₹10 to 20 lakh are reinsured and reinsurers want “a good risk to enter the system” due to which the waiting period has also been made applicable to cases of coronavirus infection.
According to Bohra, coronavirus infection has also been included in the list of conditions where the waiting period will be applicable since the death rate is high due to the infection.
“Previously, the mortality rate was lower and more risk was accepted. Any amount of premium is not enough to pay claims if the mortality rate is going to be high. With COVID, it’s not like a simple cold or flu.
“It also damages other parts/organs of the body, especially the lungs, so it is difficult to assess the survival rate if a policy is issued for a longer period,” Bohra said.
the waiting period condition for people who have recovered from coronavirus infection will only apply to life insurance policies, not health, said Yogesh Agarwal, founder and CEO of Onsurity. Additionally, this will only apply to new retail customers and existing policyholders will not be affected in any way, he added.
In FY21, the country’s largest life insurer, LIC, sold ₹442 crore as reinsurance premium, against ₹327 crores in the prior fiscal year. Private sector players caved together ₹3,909 crore as premium for reinsurance, against ₹3,074 crores in the previous fiscal year.
(With PTI inputs)
Never miss a story! Stay connected and informed with Mint. Download our app now!!