Impact of Coronavirus on Life and Health Insurance Policies Insurance regulator Irdai has directed insurance companies to expedite coronavirus related claim settlement

Coronavirus has caused 9 deaths in India so far, with confirmed cases to touch the 600 mark soon. As numbers increase rapidly, how can health and life insurance policies come to your aid if you or your family member is tested covid-19 positive?

Earlier this month, the Insurance Regulatory and Development Authority of India (Irdai) had issued guidelines for health insurers asking to expedite coronavirus related claim settlement in the case of hospitalisation.

Industry experts that Entrepreneur India spoke to say that the claim settlement process for covid-19 related cases will remain the same as other illnesses.

"This is not the first time of a virus outbreak. There have been Ebola, Zika, Nipah in the past, and coronavirus is just another one such outbreak. A health insurance policy covers all types of infections and coronavirus will also be included," says Mayank Bathwal, CEO, Aditya Birla Health Insurance. "Anyone who is hospitalized for 24 hours as a result of coronavirus will get coverage."

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Apart from hospitalization charges, most health insurance policies will also cover post-hospitalisation expenses incurred during the recovery period. "Since COVID-19 is a new disease and does not come under pre-existing disease, it will be covered under your base policy. Hence, the insured will be provided with all the covers, including in-patient treatment, pre and post hospitalization, and other test and diagnosis," states Reliance General Insurance guideline on coronavirus related coverage.

Bathwal says "All covers such as in-patient treatment, pre-hospitalization, post-hospitalization, OPD and ambulance cover that a health policy offers will be available to the insured to fight against this pandemic."

In fact, Edelweiss General Insurance has extended hospitalization coverage to quarantined cases that have not even been diagnosed positive. "We have decided to cover hospitalization for not only those who have a confirmed diagnosis but also those who have been quarantined in specific facilities identified by the government. The coverage amount is up to the sum insured under the policy. For the quarantined patients, the health policy ensures coverage for the entire period of quarantine with up to 100 per cent of the claim amount being paid against quarantine and detection charges," a company statement said.

Some insurance policies have the clause of not covering pandemics and epidemics, but industry experts believe all companies will have to comply to Irdai's strict directive. "The regulatory stance is very clear that claims reported under Covid-19 should be reviewed thoroughly before rejecting any claim. This is a worldwide emergency and we don't think any claims related to coronavirus will be rejected," says Sanjay Datta, Chief- Underwriting and Claims, ICICI Lombard General Insurance. "Our policies don't have pandemic exclusion," he adds.

Nevertheless, it is advised that the policyholder check with its insurer about the terms and conditions of the policy to avoid hassle at the time of making a claim.

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What About Life Insurance

Just like health insurance, death due to coronavirus will be honored in life insurance settlement. Health-related illness that results in death of the insured are generally covered under life insurance policies, say experts. "Insurers will be closely monitoring all the claims coming in basis coronavirus detection and shall expedite the claim processing of such cases," says Manu Lavanya, Director and Chief Operations Officer, Max Life Insurance.

If you have already contracted the infection at the time of applying for a policy now, the insurer is likely to reject or hold the policy. Insurance companies ask for medical history declaration and even conduct tests to determine medical history. "The only grounds of claim rejections remain where the policyholder had pre-existing health conditions at the time of buying the policy but did not disclose it. This is as per the industry standard claims terms and conditions," explains Lavanya.

If you are applying for a policy now, it is advised to declare all details correctly upfront so that full death benefit is paid to the beneficiary later even if the death is caused by coronavirus.

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