As India grapples with the second wave of Covid-19, many have understood the importance of insurance, both life and health, and are actively signing up for new policies in recent times. However, if you are among those who were unfortunately infected with Covid , and have subsequently recovered, you may find it difficult to sign up for a new policy, particularly a term life policy. This is because insurers are cautious and have tightened underwriting norms, as the after-effects of Covid remain to be seen.
In life insurance, while policyholders who had not been infected with Covid and are otherwise found to meet all conditions for coverage are accepted in the usual manner, those who had recovered from the same are evaluated based on factors such as nature of infection, treatment offered and current status.Accordingly, insurers make room for a recovery period. Life insurers including SBI Life and Kotak Life, for instance, have a cooling-off period of 30 to 90 days post which the policy is issued.
According to Sunil Sharma, Appointed Actuary and Chief Risk Officer (CRO), Kotak Mahindra Life, “If the life to be assured has a Covid history, the insurance cover can usually be considered three months post complete recovery, subject to underwriting. Additionally, specific medical tests may be requested on a case-by-case basis based on the information provided, to evaluate the risk”.
At present, post the said recovery period, policyholders are accepted without any need for restrictive clause or increase in premium. Sajja Praveen Chowdary, Head, Term Insurance, policybazaar.com, says, “There is no differential premium as of now between an individual who has recovered from Covid and a healthy person.”
Further, according to industry sources, in the future, if it is proven that there is a lasting health impact due to Covid, then the underwriter may charge additional premium for those who have recovered. This is similar to differential premium charged for a smoker and a non-smoker.
In life insurance, post recovery from Covid infection, policyholders may be asked to submit a Covid negative report in addition to other medical records. Similarly, policyholders may be subject to additional scrutiny if one of the family members tested positive and later recovered or passed away (if they had been living under the same roof).
Also, given that life insurance is a long-term contract with policyholders, there could be a stringent on-boarding process of new policyholders irrespective of whether he/she contracted Covid. For one, almost all the life insurers including LIC and SBI Life have introduced Covid questionnaires where the prospective policyholders have to provide details such as whether they have travelled abroad in the past six months to one year, whether they plan to travel abroad, date of discharge in case of a Covid-19 diagnosis and whether full recovery has been achieved. This questionnaire is to be submitted along with the proposal form while buying the policy.
Delay in health policies too
In health insurance, while there is no cooling-off period or postponement of policy issuance to new policyholders in many cases, the health/general insurers are cautious when on-boarding customers, particularly those who had recovered from Covid. A few insurers including ICICI Lombard, Max Bupa and Manipal Cigna do have a cooling-off period (in the range of 15-90 days) when on-boarding a customer.
Priya Deshmukh Gilbile, Chief Operating Officer, Manipal Cigna Health, says “While the vaccine is a preventive measure, members who have had a Covid infection may have a possibility of future complications. From that perspective, a person who has been Covid-positive but who is getting vaccinated will still undergo the cooling-off period, and it does not have a bearing on premiums.”
Those who have recovered from Covid, in addition to providing details regarding current health condition, may be required to submit medical records, details of treatment undertaken, the severity of infections and past medical conditions and corresponding records, to the insurer. Some insurers require additional medical tests but it differs on a case-to-case basis. “A medical check-up requirement for those recovered from Covid will depend on the extent of the hospital treatment or the level of damage to the lungs and other vital organs,” says Gurdeep Singh Batra, Head – Retail Underwriting, Bajaj Allianz General Insurance.
Many insurers require that if an individual with pre-existing condition such as diabetes, asthma or hypertension has recovered from Covid, he/she may have to undergo further medical tests in addition to submitting a Covid-negative report. However, this is not a universal requirement.
Do note that health policies generally come with an initial waiting period of 30 days..
If you have any pre-existing conditions, there is a waiting period of 2-4 years and there are disease-specific waiting periods as well that vary with insurers. Even if you consider Covid-specific insurance policies like Corona Kavach or Corona Rakshak, there is a waiting period of 15 days.