Does Term Insurance Plans Cover COVID-19 Claims?

The ongoing global health emergency caused by the novel coronavirus has affected more than 8 million people across countries. The virus has impacted the physical, as well as the mental well-being of people. 

So, what is this novel coronavirus or COVID-19?

What is COVID-19?

Coronavirus is a common virus that has been affecting animals. However, the novel coronavirus strain – the COVID-19 is an infectious disease that has recently been discovered in humans. The outbreak happened in Wuhan, China, and since then, it has spread across the globe infecting millions.

COVID-19 causes mild to moderate respiratory illness in the general populace. However, senior citizens and people with co-morbidities (underlying medical conditions) can develop serious to very serious illness. It is spread through the droplets of saliva or nasal discharge if an infected individual coughs or sneezes. Therefore, it is imperative to constantly wash your hands and avoid touching your nose, mouth and eyes, after touching possibly infected surfaces.

Since it is an air-borne disease, closes proximities and crowds are hotbeds for the viral transmission. As a result, most countries locked themselves down after the initial outbreak. The lockdowns, still continuing in most countries, caused economies to slow down. Many people have either lost their jobs or working with reduced salaries, which has created severe financial crunch.

Amidst such trying times, it is always beneficial to have a reliable and robust asset by your side, such as a term plan. 

What is Term Insurance?

A term life insurance plan is a pure risk plan that aims to provide financial protection to the family after the policyholder’s demise. Generally, term insurance plans do not have a maturity benefit attached to it. As they offer a simple death benefit to the nominee, term insurance plans have extremely economical premiums. 

Do term plans in India cover COVID-19 claims?

Considering the spread and severity of the COVID-19, the Insurance Regulatory and Development Authority (IRDA) of India instructed insurance companies to offer coverage to the COVID-19 claims in the existing insurance policies. 

Thus, insurance providers in India have recognised the specific requirements of people and are considering COVID-19 deaths as general deaths, and the death claims will be admissible under the existing term insurance policies.

Some of the key highlights of investing in a Term Insurance plan during the pandemic includes:

  1. Comprehensive life cover with enhanced coverage for COVID-19: Typically, a term plan includes providing a death benefit to the family in case of death of the insured. It also allows the insured to include critical illness, disability, etc. as add-on covers. However, the extent of coverage is limited by certain rules such as an exception to global pandemics, natural disasters, etc. 

But with the IRDAI mandating insurers in India to offer COVID coverage, leading insurance companies are covering the claims made against the death of the insured due to COVID-19.

  1. Simple application process with minimum documentation required: Generally, term insurance companies offer a remarkably simple procedure to buy a term policy or file for claims. To combat the COVID-19 situation and ease some burden of the affected families, leading insurers have simplified process even further. Affected families or the nominee can file a claim with minimal documentation as listed below:
  • Original policy documents
  • Death certificate of the insured from the Municipal Authority
  • Cancelled cheque by the beneficiary
  • KYC of the beneficiary
  • Copy of cause of death certificated provided by the doctor or the hospital.
  • A report testifying cause of death of the insured due to COVID-19 complications
  1. Extensive coverage at a nominal cost: As discussed, term insurance plans offer pure life coverage at extremely affordable premiums. Along with the life cover, the insured can secure his/her family against unfortunate events such as critical illness, accident, and disability with nominal addition to the base premium. This is specifically beneficial given that the COVID-19 situation and the resultant financial crunch have caused people to live off their life savings. People can use the term plan premium calculator offered by various insurance providers to calculate the exact premium payable for their term insurance plans.

In all, with no relief to the current pandemic situation available in sight, it is advisable to protect yourself with an optimum term insurance plan. Buy a comprehensive term plan that caters to the need of the hour with its economical coverage, along with great customer service.

Secure your family’s financial future with a term life insurance today!