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Vaccine status will also help in underwriting people with co-morbidities such as diabetes and hypertension, as people with 1st dose or both doses of vaccination will have an extra layer of protection
With over 4,000 deaths being recorded daily since last few days, Covid-19 is turning out to be a catastrophic event. In the view of rising mortality rate, your vaccination certificate could prove to be an important document while buying insurance policies in future. This is because Covid-19 vaccination is meant to protect policyholders against the likelihood of getting infected with Covid-19 and even if they get infected post their vaccination, it is likely to result in a less severe hospitalisation.
“Unless the second wave of Covid-19 diminishes soon, it can cause more catastrophe to both health and life insurers. Therefore, it is quite logical that in future, from an underwriting perspective both life and health insurers would like to assess the risk of the customer regarding Covid-19 vulnerability and in fact, people who are already infected and recovered will be a safe risk because they would have developed natural immunity. Secondly, people who are vaccinated with at least 1st dose of vaccine will be preferred by insurance companies as against the people who are not vaccinated. While insurance companies may not have harsh policies such as rejection of policies in case a customer is not vaccinated because it will be an extreme step,” said Nikhil Apte, chief product officer – product factory (health insurance), Royal Sundaram General Insurance.
Vaccine status will also help in underwriting people with co-morbidities such as diabetes and hypertension, as people with 1st dose or both doses of vaccination will have an extra layer of protection. “While underwriting a case, a customer with same co-morbidities -vaccinated/covid recovered will be preferred against non-vaccinated person wherein lesser loading/copay will be applied in case of vaccinated/covid recovered person,” said Apte.
Life insurance companies are also reeling under the impact of increased claims in term insurance due to pandemic. Therefore insurers have started making changes in their underwriting policies. SK Sethi, director and founder, RIA Insurance Brokers, said: “Tata AIA has come out with changes in its underwriting guidelines. According to which for proposers with age 45+ attaching vaccine certificate will an important document. It means that no policy will be issued if the proposer has not gone in for vaccination.”
Similarly, Reliance General Insurance has made an attractive offer by giving a one-time 5% discount on buying or renewing insurance cover to those customers who have taken the Covid-19 vaccines. Assume your premium is Rs 60,000 +GST. It means your premium will be reduced by Rs 3,000 which with the inclusion of GST will give you a saving of Rs 3,540. This turns out to be a real good deal resulting in decent saving. Customers who have vaccinated themselves even with the first vaccination dose are eligible to avail of this benefit.
“I think once the entire population is vaccinated or at least 60% is vaccinated this becomes redundant. What I do see happening is insurance companies making provisions on their books for future occurrence of pandemics which means a bit higher premiums. This year can be a big hit on their books. We strongly feel that in the long run, the partly funded insurance model which we are pioneering where the customer has to take a small risk is the only way to offer an affordable product,” said Rahul Kumar, CEO and co-founder, Vital, provider of personalized health plans.