COVID-19 AND CLAIMS THEREUNDER
During the devastating second wave of the coronavirus pandemic, there were a record high number of deaths all over India. In a time that has left homes badly shaken up from loss and challenging situations, the state and society need to rise to the occasion to help those who have been most badly impacted.
While most states have made provisions to try and ease the situation for those suffering from the loss of a family member, there are reported incidents of beneficiaries of private term insurance policies facing difficulty in receiving their due claims when the policy holder has died due to COVID-19.
Ideally, such a situation should not arise because COVID deaths are covered under term insurance policies. However, several factors are at play in the claim process and are addressed in further detail.
GOVERNMENT AID TO FAMILIES FACING COVID DEATHS
The last few months have seen a lot of homes losing one, or sometimes more family members, in some cases leaving the family without a bread winner or children orphaned. The state governments are aware of the challenge such families will face and have announced various schemes and policies as aid.
For instance, in Delhi, any family that has had a COVID death receives a sum of Rs. 50,000/- from the state, Rs. 2,50,000/- if the family has lost its sole bread-winner, and Rs. 2,500/- monthly pension to children who have lost both their parents to COVID, till they attain the age of 25 years. [Covid-related Official Orders by the Delhi Govt. at http://health.delhigovt.nic.in/wps/wcm/connect/doit_health/Health/Home/Covid19/Covid+19+Related+order+May+2021] Tamil Nadu has offered Rs. 25,00,000/- to each family who has lost a family member who was a doctor succumbing to COVID in the line of duty. [Official Press Release at https://www.tn.gov.in/pressrelease/archives] States have made provisions for deaths caused due to lack of oxygen, or in the line of working to prevent the spread of the virus. Bihar has offered a sum of Rs. 4,00,000/- to any family that has had a Covid death. [See https://covidportal.bihar.gov.in/document#] These are just some of a large number of existing relief claims given the state governments in these unprecedented times.
SPECIFIC SREPS BY IRDAI
The Insurance Regulatory and Development Authority of India(IRDAI) has also issued specific guidelines and policies relating to COVID-19. Arogya Sanjeevani Policy, Corona Kavach Policy, which relate to covering hospital charges, and policies creating ease of transactions and treatment in case of adverse effects of the vaccine are also in place. [Policy details available at https://www.irdai.gov.in/] As per the IRDAI, with regard to coverage granted for treatment of hospitalization expenses, in order to alleviate the hardships that may be caused to the policyholders, all claims reported under corona virus shall be handled as per specific norms. Firstly, where hospitalization is covered in a product, insurers shall ensure that the cases related to Corona virus disease (COVID-19) shall be expeditiously handled. Further, costs of admissible medical expenses during the course of treatment including the treatment during quarantine period shall be settled in accordance to the applicable terms and conditions of policy contract and the extant regulatory framework and all the claims reported under COVID 19 shall be thoroughly reviewed by the claims review committee before repudiating the claims. The Guideline also states that in order to provide need based health insurance coverage, insurers are introducing products for various specific diseases including vector borne diseases. For the purpose of meeting health insurance requirements of various sections, insurers are advised to design products covering the costs of treatment for Corona Virus. [Guideline Ref: IRDAI/HLT/REG/CIR/054/03/2020 at https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo4057&flag=.] This circular by the IRDAI was an early step providing reassurance to policy holders that their medical insurance will cover their treatment costs for COVID-19 and avoided a large number of disputes. These are but a few examples of what is available to the citizens, but it is well understood that in most cases, such aid does not prove to be enough. While the government is providing specified sums, citizens are also entitled to avail the full benefits of their term life insurances with private or government entities in these trying times.
ISSUES ARISING IN CLAIMING LIFE TERM INSURANCES IN CASE OF COVID DEATH OR TREATMENT
Under most premiere insurance policies, one can now find clarifications in their brochures and websites that if an individual has an existing term insurance plan, it will cover death from the deadly coronavirus. Death by the COVID-19 is considered as a ‘general death’ by most insurance companies and the nominee will be given the sum assured at the time of settlement as far as all other terms are satisfied. The Life Insurance Council clarified as early as in April 2020, that no insurance company will deny COVID death claims. [Official Press Release dated April 2, 2020 at https://www.lifeinscouncil.org/media_center/Press_Release/2020/April/All%20Life%20Insurance%20Companies%20Will%20process%20COVID-12%20Death%20Claim.pdf] However, at the peak of the second wave, the Union Finance Minister had to address the IRDAI Chairman to act immediately to address the complaints of denial of cashless claims by insurance companies due to a large number of patients in desperate need facing this issue. There were multiple reports of insurance claims being denied as hospitals and insurance companies fought over the bills. This has happened despite the IRDAI circular of March 2020 [referenced above]. Since so many fail-safes have been created around life insurance claims so that they are not denied to COVID patients, there are fortunately few reported cases of term insurance being denied on technical grounds. This implies that if you are a beneficiary of such a policy, know that you have a protected right which and the insurers have a duty to allow your claim as per current guidelines. Another shocking aspect to emerge however, is that while loss of lives are at an unprecedented high in the country due to the pandemic, group life insurers either refuse to renew the cover or want up to 150% higher premiums. [Reported by Bloomber Quint at https://www.bloombergquint.com/business/ insurers-refuse-to-renew-group-life-covers-or-want-up-to-150-higher-premiums]. An ever higher hike in the prices of medical insurance policies, even for existing members, has been noticed. While the government has not currently dealt with this, this appears to be a somewhat predatory approach by the insurance companies who had collected thousands of crores in their coffers before the corona virus pandemic had spread, and are now exploiting the technical terms of their carefully worded agreements against the policy holders to earn more money.
CONCLUSION
Coronavirus has been one of the most novel and devastating challenges faced by mankind in the last century. In such a situation, exploiting mere technicalities and helpless beneficiaries in the midst of a grave loss is nothing short of a disservice to humanity.
We are in a time when support must be extending without hesitation. Therefore, in case of a COVID-death or a death due to complications arising post recovery from COVID but as a result of the issues caused by the disease in the body, claims for insurance shall not be denied. This view regarding claims is evident from the efforts of the state and the stand and clear guidelines of the IRDAI, and should be duly followed by insurance providers.
Further, this is not the time for insurance companies to ensure profits at the cost of lives and increase premiums, since many medical and term insurance companies have greatly increased their premium at a time when the average income in most Indian families has been impacted or has gone down. Because of the genuine fear of medical bills and loss of lives created by the pandemic, policy holders are scared to protest or opt out and are being forced to pay the much higher premium. Currently, the government has not issued any guidelines in this regard but if this exploitation continues, this issue may have to be addressed by state policy guidelines as well.