The seriousness of COVID-19 can no longer be ignored. With COVID-19 positive case count and deaths increasing by the day, it is important to know if your Life Insurance policy will cover deaths arising out of COVID-19.
With the WHO declaring COVID-19 a pandemic, a lot of insurance providers may not cover hospitalisation or treatments in case of an infection if they have a clause of not covering epidemics/pandemics. In fact, if you’ve recently purchased Health Insurance, your policy may not cover it if you contract the disease during the policy waiting period. It’s still best to check with your insurance provider in this matter though.
While the Indian Council of Medical Research maintains that India is still in stage 2 of the transmission, the climbing death toll and the number of infected cases with no foreign travel history emerging, many people fear that we may already be in stage 3 of community transmission. So will your Life Insurance policy cover deaths arising out of COVID-19 in such a scenario? Let’s take a look.
Two scenarios can emerge in this kind of a situation:
Existing Life Insurance policy holders:
If the individual who passes away due to COVID-19 already has a Life Insurance policy, then the insurer will pay the nominee the sum assured as the death benefit. However, the nominee will need to file a valid Life Insurance claim to avail this benefit. Death benefit is nothing but the agreed amount of money that the insurer has agreed to pay the nominee/beneficiary of the Life Insurance policy in the event of the death of the policyholder. Nominees/beneficiaries can check the sum assured amount in the policy document.
In spite of the fact that some insurance companies have exclusions for a specific cause of death, deaths arising out of COVID-19 will be covered if you have an exsiting Life Insurance policy.
Additional Reading: What To Do With Your Travel Fund If COVID-19 Has Derailed Your Trip
2. Will your Life Insurance Cover COVID-19 If You Buy Now?
If you’re planning to buy a Life Insurance policy amid the COVID-19 crisis, then you should know that insurers determine the premiums of a policy on the basis of your health and medical history. It’s only natural that a global crisis like this is likely to have some impact on the acceptance of your policy and premiums if your policy application has still not been approved.
One thing to bear in mind, however, is that COVID-19 or no COVID-19, it’s crucial that you comb through the fine print and exclusions of your Life Insurance policy carefully before signing on the dotted line.
Additional Reading: How Does Coronavirus Impact Your Insurance?
Will Life Insurers Consider COVID-19 To Be A Critical Illness?
Again, that depends on the insurer considering COVID-19 to fall under the purview of critical illness as spelt out in the policy. Many Life Insurance policies have add-ons for critical illnesses. For a death claim arising out of COVID-19 infection to be approved under this category, all the conditions including those pertaining to treatment and medical advice must be adhered to.
In the same vein, the insurer will pay out the death benefit as per the rider’s terms and conditions. For instance, many critical illness riders mention that the critical illness benefit will not be paid out if the critical illness is caused directly or indirectly by any of the listed critical illness conditions where death occurs within 30 days of the diagnosis. In such scenarios, however, the insurers will stay pay the basic sum assured.
Before purchasing any Insurance policy, it is of essence that you pay close attention the fine print and clarify any concerns that you have with your insurer. This will ensure a hassle-free experience for you and your family at the time of claims. In the meantime, stay home and stay safe.
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