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Impact of COVID-19 on Policy Premium Payments

During a pandemic, health insurance can play an important role in ensuring that people get adequate treatment. For over two months, the entire country was under a severe lockdown leading to an abrupt stop to businesses. As a result, many people experienced salary cuts or even lost their jobs, causing a liquidity crunch. The Insurance Regulatory and Development Authority of India (IRDAI) understood this need and took some steps to ensure that people continue with their health insurance policies to protect them against financial losses if they got infected.

Premium Payment – Instalment facility

In the last week of April, the IRDAI declared that all insurance companies could collect the health insurance payments in instalments. It also said that the insurers can offer this facility as a permanent feature or temporarily for 12 months. All policies that were due for renewal up to March 31, 2021, must be included in the instalment facility.

According to the notification, all policyholders will be given the option of paying their health insurance premiums in monthly, quarterly, or half-yearly instalments. If you already have a health insurance policy, then you need to get in touch with your insurer for details.Further, the IRDAI has also specified that the insurance company needs to display the details of the instalment facility clearly on its website along with the names of the products. It has also warned insurers of discrimination and said that all policyholders should be offered the instalment facility. The insurers also need to obtain consent from the policyholders for the same.

As people were coming to terms with the lockdown and the impact on their income, paying the annual health insurance premium could seem like a financial burden. Hence, the IRDAI identified this need and decided to help people continue having health insurance while easing the burden of paying the premium in one instalment. With this announcement, people will be able to continue having a health insurance policy without having to worry about making a large payment as premium.

Health Insurance during the COVID-19 pandemic

IRDAI’s notification came at a time when people needed it the most. The medical community is still trying to understand the novel coronavirus and find a vaccine or cure to combat it. While the recovery rates are good, the hospitalization costs can touch ₹5-6 lakhs at a private hospital in India without ventilator support. In severe cases, where ventilators are needed, the costs can go up to ₹10-12 lakhs. This can be a huge financial burden considering the stalled economy and reduced income.

During such times, the IRDAI mandated all health insurers to include COVID-19 in the list of ailments covered by regular health insurance plans. This came as a huge relief to people who were already struggling with their finances.

The novel coronavirus is highly infectious and can spread through human contact or other means too. In a country where cities have a high population density, stopping the spread of the virus is difficult. Hence, it is important to be financially prepared for unexpected medical exigencies.

Other benefits offered by health insurance companies

Along with the IRDAI, health insurance companies also realize the criticality of the current situation and have stepped up their efforts in reaching out to people to ensure that they are financially protected against sudden medical costs. Major insurers like Tata AIG are also offering a COVID-19 policy with a validity of one year targeted at covering the costs associated with the pandemic.

Also, while the entire world is focused on the pandemic, other illnesses or diseases can still cause the medical costs to rise. Hence, insurers are reaching out to people via technological platforms and have made the process of buying health insurance easy and hassle-free. Despite the severe lockdown measures, most insurers have asked their employees to work from home to ensure that your queries are answered on priority.

Epidemics and pandemics usually manage to shift our focus from our jobs and career to our health and well-being. While living a healthy life by eating well, exercising regularly, getting adequate sleep, etc. can help boost our immunity levels and following the preventive measures announced by the authorities can keep us safe, a comprehensive health insurance plan is the safety net that protects you financially in case of an unfortunate medical emergency.

Summing Up

Since the outbreak of the pandemic, insurers have seen a sharp rise in the number of people buying health insurance online. They are researching all available policies, comparing them, and using add-ons or riders to create the perfect policy for their needs. With people above 60 more prone to experiencing severe symptoms, many senior citizens are also looking at buying an insurance cover to manage the costs. In such times, IRDAI’s announcement of offering an instalment facility for premium payments comes as a welcome relief.