By Vaidyanathan Ramani
The rapid pace at which the Covid-19 has spread globally has forced people to take insurance seriously, mostly health and life. People are increasingly realising that there are chances of risk at all times and it is important to stay adequately protected.
The key motive of a term insurance plan is providing financial and liability protection to the dependents of the policyholder. The core objective of term life insurance is actually ‘protection’. A term life insurance policy acts as an income replacement tool for the family in case of the sudden death of the policyholder.
A term plan even provides adequate protection against disease and disability. Under protection against disease, the insured can choose to buy a separate Critical Illness Rider under which the policyholder is paid the entire sum assured in case of a critical illness. This amount can be used to pay for the cost of treatment and also for loss of income due to the absence from work during the treatment and recovery period.
Apart from death due to pandemics, term life insurance covers deaths due to a plethora of causes which also includes natural death. For complete protection of the customers, today there are several term plans available in the market that offer coverage up to 99+ or even 100 years. Your family is dependent on you even after you are gone and you certainly don’t want to let them down. Whether it’s for replacing lost income, paying for your child’s education or making sure your spouse gets the much-needed financial security, life insurance could save the day for your surviving dependents.
The scenario for health insurance would also be the same as people will start realising the importance of an adequate health cover much more than ever before. There will a fair surge in the number of people buying health insurance as after a pandemic like Covid-19 people will realise that not being infected by such a deadly virus is not completely in one’s hands. Moreover, people will now think about securing their own and their loved ones’ lives under a comprehensive health insurance plan rather than the one provided by the employer.
There would also be a significant rise in disease-specific health plans as these are only for widespread infections as against normal hospitalisation in order to keep the cost of treatment low. The basic reason for keeping the prices of all such plans relatively low is that the treatment of such infections is very basic as it does not include any surgeries. It is only in certain extreme cases that patients require severe treatment.
The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurers to come up new need-based products for coronavirus, and for which, a few insurers did come up with such need-based specific products to cater to the current requirement. These are defined benefit-based product where the benefit is paid on the occurrence of the event and no bills are required. In the coming years, there would be a significant surge in the demand for such disease-specific plans and even the insurers will think more about product innovation and try to launch such plans as soon as an epidemic or pandemic strikes.
The writer is head, Product & Innovations, Policybazaar.com