The COVID pandemic situation has stalled the life of people throughout the world. The only solution that comes as an immediate resort to such uncertain conditions is a Life Insurance Plan. Insurance companies have understood the gravity of the situation and started working towards serving society better with targeted plans and coverages. 
 

However, due to the increase in deaths and the cause being a unique novel coronavirus, you might be apprehensive about the extent of coverage of your existing life insurance plan. Here is a detail about how COVID can affect your policies such as term insurance, guaranteed¹ return plan, etc.
 

 

Does your life insurance plan cover deaths due to COVID?
 

The life insurance plan will certainly cover the death due to COVID. The sum assured will be provided to the nominee in case of the sudden death of the policyholder. However, the family has to furnish the necessary documents and file the death claim appropriately for the settlement process. It is also pertinent to mention that the policyholder's death should have happened in the policy term to avail of the benefit. 
 

Many insurance companies have come forward to aid their customers, like the  TATA AIA payment in the death claim has been enhanced with an additional monetary benefit for all the settlements made in the current COVID pandemic scenario. It has not altered the death benefits in life cover on any form of the life insurance policy. It is, in fact, customizing the features to protect the family from the financial crisis due to COVID deaths in the best possible manner.
 

 

Why does a death claim get rejected?
 

A death claim in a life insurance policy is rejected when the death is caused due to a pre-existing ailment. While calculating the premium for a policy, the medical records and health condition is analyzed to find the probability of death. The policyholder has to inform the insurer if a pre-existing ailment can possess a death risk. Non-compliance to this feature will lead to rejection. 
 

Deaths in the case of COVID are not due to a pre-existing ailment and do not qualify for the rejection process in any way. However, the life cover is considered when the policy is separate for an individual and not available for claim in the case of a joint policy.
 

If a new policy is purchased in the present situation, it does provide the insurance benefits based on a clear medical examination of the individual. The age, physical condition, and medical history are well researched before providing the benefit. However, if the person is already infected with coronavirus, certain terms and conditions are specific to the companies and plans for consideration.
 

 

What is the impact on guaranteed¹ return plans in India?
 

A guaranteed¹ return plan is also a type of life insurance plan that provides life cover and assured returns to the family after the maturity period. In such a COVID pandemic situation, this is one policy that ensures a wholesome benefit to a family that has lost the only earning member. 
 

The sum assured is provided to the family as a lump sum amount in case the policyholder dies due to COVID. Additionally, guaranteed¹ returns are ensured as per the terms of the policy. The nominee can receive the returns from the guaranteed¹ insurance plan in three ways: 
 

1. As a lump sum amount along with the sum assured.

2. As a guaranteed¹ annual income. 

3. As a whole life income plan.
    

It is decided at the time when the policy agreement is being finalized. The guaranteed¹ return plan with a whole life income plan  will provide a regular income to the policyholder's family for a set period after the maturity period. It can be available in any intervals such as monthly, quarterly, half-yearly, or annually based on the requirements. It will be beneficial for the family to handle daily expenses to get financially stable with time. 
 

 

How has COVID impacted the customer experience?
 

 

Having understood the importance of a guarantee¹ insurance plan, people have started approaching the insurance companies to purchase these policies. The pandemic situation has introduced strict lockdown measures, which has posed difficulty in availing of such plans. The digital scenario has enhanced the customer experience by making the necessary provisions online. It has introduced an easy, comfortable, and cost-effective medium for accessing and making changes in the policies like nominee changes. The online platform has also enhanced the application and claim settlement process online.
 

Due to the increase in competition, the insurers have increased the benefits and other features in the life insurance policies. This has improved the quantum and level of protection provided to the customers.
 

 

Are the critical illness benefit riders beneficial?
 

The critical illness insurance benefit rider^# is an added advantage to a life insurance plan. When opted, it will ensure the sum assured be payable to the policyholder for medication and other treatment charges in case of a critical illness. The rider^# benefit also provides for the hospitalization charges in case of COVID treatment.  
 

 

Conclusion:
 

Protection is the goal of a life insurance company. It ensures financial support to its policyholders in the best possible manner. Life insurance with serious illness cover will provide an added advantage. COVID pandemic situation has increased the quantum of benefits provided to the policyholders to help them recover from their financial distress as much as possible. The global pandemic and the financial crisis have demonstrated the importance of life insurance in a person's life and proved that the premiums paid are worth the investments made any day. Keep yourself strong and stay worry-free if you have guaranteed insurance in place! 
 

L&C/Advt/2023/Mar/1106