Recently Insurance Samadhan did a Facebook live session to clarify the doubts on Insurance Policies with respect to Covid 19 and locked down for 21 days. We could answer many questions and compiling the same for the general interest of public. However a brief understanding is given below:
Life Insurance Contract is an universal contract only with one exclusion of suicide in first year of policy. In all other cases, insurance covers all perils including threat of virus like covid 19. So those who are insured should not have any worries.
Health Insurance is an indemnity contract and covers all treatments including that of Covid 19. Health insurance contract may have some specific exclusions but all old contracts would not have exclusion of Covid 19 because this disease was not known. However, most of Health Insurance contracts do have a clause of Force Majeure including impact of pandemic. But this exclusion can not be applied without approval of regulator IRDA. Till date IRDA has appealed to all Insurance Companies to expedite case settlement of Covid 19. So public should not worry on the front of application of Health Insurance. It is possible that Health Insurance may include exclusion of Covid 19 when you are applying a new Insurance Policy.
Public staying abroad should also not worry because their travel insurance include cover all treatment including Covid 19. This seriousness was not a known risk when you travelled abroad.
However Health or Travel Insurance would have a limitation of Sum assured because one may need a Single room or ventilator service which may exhaust Sum assured very fast. Please note that Single Room increases cost of treatment by atleast 35% thus reducing number of days of treatment.
So whether you are in India or abroad, you need to use your insurance in judicious way so that your applicable sum assured remain with you. We also need to be aware that Covid 19 spreads faster in family members. If your family is covered through Family Floater, you need to use total sum assured after consultation with your Insurer so that you are ready for any exigencies.
General Insurance is again an indemnity contract and covers specific Perils like fire, flood, natural calamity. Insurance Companies offer Loss of Profit policy – which covers risk of business loss due to closure of factory, warehouse, shop etc because of specific peril of fire or flood or natural calamity. Hence business loss due to Covid 19 will not be covered under Loss of Profit policy.
Covid 19 may offer business opportunities to Insurance Companies to design Policies covering risks like Covid 19 and many companies may be filing products with IRDA. Religare and Digit has already launched Health Cover under critical illness covering Covid 19. These products have their terms and conditions which need to be weighed before taking any decision.