Life insurance: Cured of Covid-19 and wanting to buy policy? Please wait! Here is why

Cured of Covid-19 and wanting to buy a life insurance policy? Then wait for a period ranging from one to three months, say life insurers.

This has been the practice of some life insurers during the first wave of Covid-19 and now practiced by others as well," a senior insurance industry official told IANS.

With the reinsurers forcing the primary life insurers to put their skin in the game, the latter have turned cautious while accepting lives for insurance under their term policies.

So, what is the waiting period? Normally in insurance, the term waiting period means a specified period for which certain risk covers are not provided and the cover kicks in after that period after the premium is paid.

For instance, in the case of Corona Rakshak policy, the waiting period is 15 days from the date of commencement of the first policy.

However, in the case of Covid-19 cured persons, the waiting period for buying a life insurance cover will be three months if he/she was hospitalised and one month in case of home quarantine, said an agent of HDFC Life Insurance Company Ltd.

The waiting period will be counted from the date on which the prospective policy buyer is certified as Covid-19 negative.

According to industry officials, the life insurers are trying to safeguard themselves against death claims due post Covid-19 complications.

"On what basis the waiting period has been arrived at is not known. With the pressure to show performance, growth in topline, there may be some life insurers who accept the premium upfront from Covid-19 cured persons and provide the risk cover after the waiting period," an industry official told IANS.

In other words, charging a premium for a full year and providing cover for nine or 11 months as the case may be.

Altering the period of cover during the first year is a major change in the policy condition and life insurers should inform the IRDAI upfront in the case of 'file and use' products.

According to the official, this issue will be known only to the Insurance Regulatory and Development Authority of India (IRDAI) when it carries out inspection of the life insurers books.

Despite several attempts by IANS and messages, K.Ganesh, Member (Life) and Pramod Kumar Arora, Member (Actuary) at IRDAI were not available to comment on the issue.

The IRDAI's mission is to protect the interests of policyholders.