The growing importance of insurance in Covid-19 times

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Updated: Aug 12, 2020 4:15 PM

Health and life insurance is not just a matter of benefit but a necessity in these times of emergency. It is predicted that the majority of individuals will be inclined to get a risk cover.

Covid specific health insurance, Covid specific insurance, Covid Rakshak, Covid Kavach, should you opt for it, mediclaim policy, IRDAIIf you are still considering getting a policy, here are some key points:

COVID-19 shook the world within a couple of months. It brought to light the importance of precaution amidst the global panic created. People from all backgrounds and age groups have now become sensitive about their health. With this growing awareness, India has seen a spike in investment in the insurance industry. Health and life insurance is not just a matter of benefit but a necessity in these times of emergency. It is predicted that the majority of individuals will be inclined to get a risk cover.

If you are still considering getting a policy, here are some key points:

Lack of liquid assets

There is a record high rate of unemployment and job losses across the country. This has resulted in a cash crunch leading to budgeting of non-essential expenses. There is also an increasing concern around treatment expenditure, particularly hospital bills, in case of an unfortunate event of hospitalization given the current scenario. Job security is also under threat in the given unstable individual’s economic condition, which is further worrisome for the working class. These stressful triggers have been pushing more and more people to look for health and life insurance plans for themselves and their dependents.

Long term financial security

Consecutive lockdowns saw more and more people digging into their savings to meet their everyday needs. The tradition of having a reserve fund for unexpected circumstances is not uncommon in India. This has resulted in term or life insurance policy to come in the spotlight. Since age is a major factor when it comes to term insurance, if started early, most insurers offer a term plan at reasonably low premium rates. Another recommended cover for those in risk-prone areas is a personal accident cover which supports the dependents.

Single coverage plan for the family

To strike a balance between the demand and supply of health services, there has been an exponential rise in health care costs. Families stuck together in quarantine are now looking at family floater plans to enhance affordability. Unlike an individual policy, a family floater allows the sum insured to be shared between all members. If a family member is hospitalized, resulting in a chunk of the insured amount to be exhausted, the balance is still available for use by the remaining members. A few family floater products hitting the market are offering dual assured policies where every member is entitled to a fixed sum insured as well as a floating sum for the entire family.

Property and land safety

The first half of the year also suffered the wrath of natural calamities like cyclones and earthquakes in various parts. This served as another warning to the people to secure their homes and property with a risk cover. A property insurance plan protects your home from an earthquake, fire, or any other natural calamity. The financial assistance of home insurance also covers cases of theft, making it an ideal investment option.

While on the one hand, an increase in awareness will increase the likelihood of insurers to provide products at lower premium rates. It may also see an increase in premium rates due to the slowing down economic growth and escalating demand. Since the decision-making process is still under development, it is an excellent opportunity to secure your future financially.

By, Rakesh Goyal, Director, Probus Insurance, Insurtech Broking Company

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