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Should you renew your COVID-19 life insurance?

Easily one of the most stressful years in recent history, 2020 will always be remembered as the year that brought us the novel coronavirus or COVID-19.

Author:IndiaFirst Life | Date:28 Feb 2021 | Time:12:56:00

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Easily one of the most stressful years in recent history, 2020 will always be remembered as the year that brought us the novel coronavirus or COVID-19. Though the first case was discovered in China's Wuhan at the end of 2019, it took the first few months of 2020 for COVID-19 to become a household name across the globe.

As of February 2021, a total number of 112 million cases have been reported worldwide, with over 2.48 million fatalities. India alone accounts for over 11 million COVID-19 cases with 1,56,000 reported deaths. It is needless to say that COVID-19 is a matter of great concern, particularly for a country as populated and expansive as India.

What is COVID-19?

In a nutshell, COVID-19 or novel coronavirus, is the name given to a group of viruses that attacks the respiratory immunity of humans resulting in conditions that cover the gamut of common cold and SARS (Severe Acute Respiratory Syndrome). New strains of COVID-19 are now being discovered, which has led to further tightening of global travel and movement. The condition is particularly fatal for people who have existing health conditions and co-morbidity and those above the age of 60.
Recent advancements in medical science have brought the world a glimmer of hope in the form of potentially effective vaccines. However, there are some logistical challenges in getting the whole country inoculated. This delay and uncertainty mean that no one can afford to let their guard down. Along with using masks and sanitizing every so often, getting COVID-specific life insurance is a recommended action.

What is COVID-19 life insurance?

A life insurance policy serves many purposes. Buying a term insurance plan is a vital way to ensure that your loved ones are not left in a financial lurch in case of unforeseen circumstances. In a global pandemic, getting out of the home unprepared can result in the unfortunate transmission of COVID-19. As such, being prepared for any eventuality with rising COVID-19 cases is a sensible course of action.

A COVID-19 term insurance plan is one that offers you life cover in case of a COVID-19-related eventuality. In essence, a COVID-19 term insurance policy ensures that your family receives a death benefit in the form of a sum assured that can be used to take care of your family's needs in case of the policyholder's untimely death due to COVID-19.

India is a massive country with a burgeoning population. However, insurance penetration has always been dismally low in the nation. With the advent of the global pandemic, the importance of getting health insurance and life insurance plans is being understood like never before. The COVID-19 crisis has served as a wake-up call for a lot of people who have been putting off paying for health insurance and getting a term insurance policy to cover their lives.

A term insurance plan covering COVID-19 is likely to be one of the most pivotal purchases you can make in these uncertain times. Such a term insurance policy is not just a protection plan but an investment in your family's future stability.

Over the last year, insurers have begun to offer COVID-19-specific insurance policies. A COVID-19 health insurance plan covers your medical expenses in case of diagnosis and hospitalisation owing to COVID-19. You can choose a term insurance policy that covers COVID-19-related deaths. Such a term insurance plan offers life cover and a sum assured as a death benefit paid out to beneficiaries listed in the policy. Some insurers also provide a life insurance plan with dual benefits—term life cover with death benefit and COVID-19 medical cover for diagnosis and hospitalisation claims.

If you were one of the far-sighted ones who got COVID-19 term insurance policy coverage in 2020, should you renew your COVID-19 life insurance in 2021? Though there is plenty of positive information about the declining number of cases and effective vaccines, experts suggest that given the time it will take to do a country-wide rollout, a COVID-19 life insurance plan should be renewed.

Why should you renew your COVID-19 life insurance plan?

Here are a few reasons why renewing your coverage is a smart option:

You get continued life insurance cover

A COVID-19 life insurance plan offers coverage that is designed to protect one's family and loved ones in case of the policyholder's demise due to any reason, including COVID-19. In the fine print of life insurance plans lies a clause that states that deaths due to 'force majeure' or 'Act of God' do not get covered under most term policies. However, even though COVID-19 is a pandemic of epic proportions, it is not considered an Act of God. As such, any COVID-19 claim made against a term insurance policy will be payable by the insurer.

You protect yourself against the aggressive spread of the virus

While the COVID-19 numbers of all countries are rising, statistics show that India accounts for the second-highest number of cases since the beginning of the pandemic. India stands second to the US, which accounts for approximately three times as many instances as that in India. The COVID-19 virus is an aggressive super-spreader that is making inroads into urban as well as rural areas.

Today, most of us know at least a couple of people who have tested positive with COVID-19—we can no longer afford to think that it is a condition that happens to 'others' and not to people we know. In such a situation, one has to be mentally and financially prepared for any eventuality. Renewal of your term insurance plan is a step in this direction.

You get covered against COVID-19 treatment and expenses

Life has become more uncertain than ever before. Not only is the global pandemic spreading fast, but it has also shone a light upon the high cost of medical treatment at hospitals across the country. Private hospitals, in particular, have been charging exorbitant rates. In case the admitted COVID-19 patient succumbs to the condition, the family is left to figure out how to pay off the mounting hospitalisation expenses, which run into lakhs of rupees.

Even with medical insurance, one's family might not have the money to pay for treatment expenses once it has crossed the insurance threshold. While a government hospital might sound like a viable option, the truth is that the rise in the number of COVID-19 critical cases and deaths means that there aren't enough beds to cover the people's needs.
COVID-19 medical expenses are likely to be a burden on one's family for a long time to come. The wisest thing to do is to have term insurance policy coverage so any liabilities incurred due to COVID-19 can be taken care of even in your absence.

You understand COVID-19’s equalizing effects

At the start of the global pandemic, it was believed that only people of a specific age group were at risk of contracting the virus. This led to particularly harsh movement restrictions on people over the age of 60. Though seniors have a more challenging time combating the virus owing to old age and pre-existing conditions, the visible truth is that COVID-19 is an equalizing condition—the possibility of getting COVID-19 is present across all age groups, economic classes, and genders. Similarly, COVID-19 fatalities are not limited to one segment of society. Anyone may fall ill, and so, it is sensible for everyone to remain insured.

Your insurer has to honour COVID-19 claims

Insurers across the country are accepting claims arising from COVID-19. However, your term insurance plan needs to be active. Life insurance policies have a waiting period that begins upon receipt of term insurance policy documents. Coverage under the plan only starts after the end of this waiting period.

In case of a COVID-19-related demise, the insurer is not liable to complete the claim settlement process before the plan kicks in. However, if the policy is in force, the nominee's claim must be honoured by the insurer. Renewing your COVID-19 life insurance policy ensures seamless coverage and assures your beneficiaries that the insurer will not delay COVID-19-related claim settlement.

You enjoy the digital benefit

When social distancing and the global pandemic were not our day-to-day reality, getting a term plan would have required you to visit the insurer, meet an agent, and go for medical tests. However, one of the benefits of the current situation is that everything can be done digitally.
Buying and renewing an online term plan is quicker, more comfortable, and more affordable than offline plans. Not only will experts connect with you online, but you can also upload all documents required for your policy or renewal and make payments online too. The process of securing your family's financial future has never been more straightforward.

IndiaFirst Life Insurance's Ghar Baithe Insurance is an initiative that serves to ensure that the entire process of applying for and purchasing a term insurance plan is completed online from the comfort of your home. Since all the functions, including renewal of the COVID-19 term insurance plan, are done online, zero physical contact is required. The claims settlement process of IndiaFirst Life term insurance plans is also automated from end to end. Not only does this allow for a more streamlined claims settlement, but it also ensures that there are fewer human transactional errors and faster turnaround time.
A term insurance policy safeguards your family's financial future in the wake of COVID-19. Purchase a term insurance plan online. If you already have, ensure that you renew your COVID-19 term coverage to help your family deal with the financial aftermath of coronavirus without sacrificing their happiness and dreams.

BY

IndiaFirst Life

Headquartered in Mumbai, IndiaFirst Life Insurance Company Limited (IndiaFirst Life), with a paid-up share capital of INR 663 crore, is one of the country's youngest life insurance companies. Our key differentiators are our simple, easy-to-understand products that are fairly-priced and efficiently serviced. We offer a diversified suite of over 46 need-based products & Riders (as of 31st March 2022) catering to varied customer segments, leveraging multiple distribution capabilities and augmenting various investment options. In all, propositions under the categories of Protection, Assured Savings, Wealth, Pension, Health and Group Funds for Employee Liabilities form a complete suite of offerings that help our customers prepare for the certainties of life. Our products are easy to understand and competitively priced with risk management bein.

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