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Despite the high fatalities, the claims that life insurance industry settled related to Covid-19 death in 2020-21 stood at a paltry 0.3% of the total premium collected during the year, Reserve Bank of India noted in its Financial Stability Report.

“During 2020-21, the life insurance industry received 22,205 claims worth Rs 1,644.56 crore where death was due to Covid-19 and related complications, which amounted to 0.3% of total premium income of the year. Of these, 21,854 death claims amounting to Rs 1,492.02 crore were settled and there was no significant impact on the financials of the life insurers,” the central bank said.

RBI also said there was no significant increase in the death claims settled as compared to the previous year, when there were no Covid cases.

Incidentally, till March 31, 2021 the death toll in the country stood at 1,62,468. Of these, 47 deaths were recorded till March 31, 2020, according to Union Health Ministry data. Therefore, 162,421 deaths occurred in the financial year 2020-21. So the number of death claims received was only 13.50% of the number of the deceased during the financial year.

No significant rise

“According to the number of claims, the claims paid ratio (provisional) stood at 98.1% for individual claims and 98.6% in the group category in comparison with 96.8% and 97.3% respectively, for the previous financial year. Thus, the pandemic did not have a significant impact on death claim settlement rates,” RBI said.

On the other hand, new business premiums of life insurance picked up sharply after plunging in Q3 of 2020-21. Non-linked insurance products with guaranteed benefits increased by nearly 8% in 2020-21.

April 20 to May 15

“The total premium, which includes renewal premium, also continued the uptrend seen since November 2020. Insurance premiums collected under various Covid-19 specific policies stood at Rs 1,307 crore for an insured sum of Rs 13.6 lakh crore up to May 15, 2021,” the RBI said in FSR.

Giving a breakdown, the central bank said that between April 2020 and May 15, 2021, a total of 1.48 crore (1,48,97,704) lives were covered by Covid-19 specific policies. As many as 32.98 lakh (32,98,954) Covid-specific policies were sold in this time window.

Out of this total number, 27,62,126 Corona Kavach policies insuring 48,14,096 lives and 4,74,807 Corona Rakshak policies safeguarding 5,48,242 lives were sold. The number of other Covid-specific products insuring 95,35,366 lives were also sold during these 13-month-15-day period.

The total sum insured for these products was 13,62,244 crore and the gross premium collected was Rs 1,307 crore.

The Corona Kavach policy was an indemnity policy that provides Covid-19 treatment cover up to 9.5 months against a one-time payment.

The Corona Rakshak policy is a health insurance policy that offers lumpsum benefits. The policy period is up to 285 days.