Do life insurance policies cover COVID-19 deaths?

Let's take a look at the standing of the insurance industry regarding COVID-19, whether a term insurance policy will apply for COVID-19 also, and whether you can buy insurance after you get covid

· 4 min read
Do life insurance policies cover COVID-19 deaths?

Almost a year and a half since the breakout of the coronavirus pandemic in Wuhan, China, the world is still grappling with the most difficult public health challenge of the century. This infectious viral disease that has been declared as a global pandemic by the World Health Organisation has so far taken away over 3.5 million souls all over the world, with the number only increasing rapidly.

India is still facing a lot of financial and human losses due to the raging second wave carrying with it mutated viruses from the first wave, with a sharp rise in the number of infections and deaths, with badly-hit states like Karnataka and Maharashtra continuously extending their large-scale lockdowns to contain the spread of Coronavirus. The overall death toll of the coronavirus alone has touched three lakh since March 2020, discounting the secondary infections causing additional deaths.

In tough times like this, we should look to protect ourselves financially and medically. We need to consider the possibility of our mortality and how we can protect our loved ones in the grim scenario of succumbing to COVID-19. Let's take a look at the standing of the insurance industry regarding COVID-19, whether a term insurance policy will apply for COVID-19 also, and whether you can buy insurance after you get covid

Precaution

Note that having a life insurance contract to protect yourself and your family is only the second most important step you can take - the first being to follow proper precaution:

  • washing hands at regular intervals with alcohol-based handwashes
  • avoiding touching your face, nose, and mouth as much as possible
  • avoiding outdoor movements as much as possible unless for essential reasons
  • wear an N95 mask if you do step outside for any reason
  • follow social distancing of at least six feet if you do step outside for any reason

Financial benefits of having bought the insurance early

As mentioned countless times in our previous blogs, younger policyholders would be liable to pay much lesser premiums on their term insurance contracts, pandemic or no pandemic. This means that even during any financial distress due to the pandemic, the younger (earlier) policyholders could manage their household finances with a much higher level of relief compared to a policyholder who bought an insurance contract much later in their life. This is the main reason why it is highly recommended to buy an insurance policy as early as possible.

Do insurance companies provide term life insurance for COVID-19

The short answer is yes. Insurance companies do provide term life for any case of an unfortunate demise due to COVID-19. In fact, policyholders who had been paying premiums for their term life insurance before the coronavirus outbreak and had passed away due to this virus had their families provided with the full sum assured amount of the contract. Even now, if an existing policyholder dies of COVID-19, the policy benefit will be directly paid to the beneficiaries or nominees of the policy.

However, the rules vary a lot when it comes to those policyholders who did not have a pre-existing policy.

I have been infected and have recovered from COVID-19, can I buy a term life insurance contract?

You can, but the process of procuring an insurance contract post-COVID diagnosis is not as straightforward as for a COVID-free policyholder. If you are a COVID-survivor, insurance companies will put off the sale of a contract after a cooling-off period of one to three months if you are applying for a life insurance policy (or even a health insurance policy). Further, you will be required to take additional medical tests, possibly at your residence itself due to COVID restrictions. You will also be required to answer questions regarding any other point(s) of contact, inter-state or international travel history, previous or current symptoms of COVID, etc before you are liable to buy a contract after the cooling-off period. It is in your best interest to answer these questions honestly and with as much detail as possible so that the insurance company can assess your medical and personal situation with as much accuracy and care as possible.

Also, be ready to accept that the policy premiums will likely be more expensive due to the nationwide situation of the pandemic and the fact that a certain cure is not in sight yet.

I have not been infected by COVID-19, can I buy a term life insurance contract with protection against COVID-19?

Subhrajit Mukhopadhyay, the Executive Director of Edelweiss Tokio Life Insurance has said that his firm has seen an increase in death claims due to COVID-19, while also seeing a significant demand of people, including non-COVID diagnosed youngsters, lining up to buy insurance claims.

If you have the cash flow in your household to afford monthly premiums, it is highly advisable to get yourself a term insurance contract (if you don't already have one) as soon as possible to protect yourself and your family against any possibility of financial disarray in the grim situation of your demise. Do look up for premium calculators on insurance providing websites to look up the insurance policy best suited for you

Note: This is especially for new policyholders, or those contemplating being a policyholder - it may not feel nice to spend some money every month in the expectation of your death, as that is certainly not a 'positive thought process' - but owning a term life insurance policy will allow you to sleep a little better during this tough time. Even in the worst-case scenario of your demise, your family will be able to live comfortable lives in your absence without having to worry about a financial disaster - and that alone is a compelling reason to protect your family with an insurance contract.

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