According to life insurance companies, reinsurers are asking for covid-19-based disclosures at the time of policy purchase. With social distancing becoming the new normal, most people who resort to online purchase of policies may not be able to get one if they show symptoms of covid-19.
For example, HDFC Life Insurance Co. Ltd’s questionnaire asks for disclosures, such as “Have you or your family member been advised to undergo diagnostic tests related to Covid-19 or already have been tested positive for Covid-19 or awaiting test results of submitted samples...", “Were you ever advised to self-isolate due to personal, medical-related or for any other reason including orders issued by government health authorities or airport authorities in the interest of public health", and “Have you or your family member received any medical care, referred to a hospital or clinic for pneumonia, flu-like symptoms, fever, sore throat, runny nose, cough and breathing difficulties or have you undergone any surgical procedure during your travel abroad or in India in the last 6 months."
If you check these boxes, the insurer, in all likelihood, will inform you that it is unable to offer you the plan. This was brought to light on Twitter by Mahavir Chopra, founder, Beshak.org, an independent research platform for retail buyers. “I have been doing some research across various insurers for my work and that’s when I found this," said Chopra.
Mint reached out to HDFC Life but the company denied commenting.
For most small-ticket policies, insurers have significantly waived off medical tests to enable people to buy life insurance online. Chopra said insurers would want to filter out applicants who are buying life insurance, specifically term plans, despite knowing that they are under the risk of contracting covid-19.
“A regular term policy is not priced to cover such high-risk individuals and insurers would definitely want to know more about the intent behind buying term life insurance in such times," added Chopra.
The chief operating officer of a life insurance company, who didn’t want to be named, said cold and cough are now potential symptoms of covid-19 rather than being just a common infection. “The reason why insurers are asking for such disclosures is that there is a chance you could end up with covid-19. As an insurer, if I know that you are unwell, I will not want to issue the policy at that point in time," he said.
The addition of the covid-19 questionnaire is a phenomenon as recent as 1 June and insurance companies are taking more precautions now in terms of who they cover.
“This will happen across the board and we’ve implemented it as well. This is for all life insurance policies. The questionnaire helps us investigate the proposal a little more," said Rushabh Gandhi, deputy CEO, IndiaFirst Life Insurance Co. Ltd.
On whether this could hinder a potential buyer from making the purchase, Gandhi said that in case of online purchase, there is no real solicitation, unlike an offline consultation where there are more discussions that may actually convince the insurer to offer the policy if the customer is not seen as having high risk.
The number and kind of questions vary from company to company. Also, some insurers could be more conservative in their approach than others.
Abhishek Bondia, principal officer and managing director, SecureNow.in, said this was expected because insurers would look at all the risks while underwriting new proposals and the same could apply to health insurance as well in the future.
“It is natural for insurance companies to try and minimize their risks. From a customer perspective, it is important to buy insurance early on because if you’re in a high-risk zone (quarantined or with suspected infection), insurers could deny issuing you a policy."
For others, the alternative is to wait for a couple of months before buying term insurance.
If you go ahead by not making the right disclosures and in case a claim arises, you may not get the benefit. “If the claim arises in the next few months and the insurer undertakes an investigation and finds that you didn’t make the right disclosures, the insurer could repudiate the claim," said Gandhi.
It is advisable to be careful about the declarations you make at the time of buying a policy online. If you have symptoms of covid-19, declare them earnestly.