TomorrowMakers

The pandemic has silently raised our insurance need concerns. Here’s how we can address them.

Why the COVID-19 pandemic is a fitting time to reassess your insurance needs?

A bitter reality that emerged out of last year is the uncertainty of life and health due to the COVID-19 pandemic. Precaution and concern around the coronavirus outbreak are justified, but so is a reconsideration of our health and life insurance needs. While we must lead our life with optimism, we must also be realistic with our insurance assessment. When we take a look at our health and life cover, we must buy a life insurance or health cover package while keeping the COVID-19 uncertainty as an important factor. 

The importance of a woman’s health and life for her family is paramount, and her insurance cover should be adequate to address this significance. The morbid developments of 2021 make 2020 seem like a curtain-raiser. If you haven’t already reconsidered your health and life insurance needs last year, the need to do so this year is a no-brainer. Here’s why.

  • Numbers don’t lie: The number of insurance claims has increased significantly this year. The number of non-life insurance claims clocked over 14.8 lakh, amounting to Rs 23,000 crore till May this year. The Ayushman Bharat initiative increased health insurance penetration in India from 34% to 50%, with standardised products like Arogya Sanjeevani, Corona Kavach, and Corona Rakshak. 
     
  • Delays in new policies: Due to the increased demand in the insurance market, and the higher risks due to the pandemic, insurance companies are taking more time to accept new policies. Medical tests are being done more stringently by insurers and COVID survivors are being checked for the criticality of their infection.
     
  • Post-recovery waiting time: Many women are finding it difficult to buy new life and health insurance plans after their COVID-19 infection. Insurance companies are defining a cooling-off period for COVID survivors before they can apply for a new policy. This waiting period starts from the date of the negative report after recovering from COVID.
     
  • Sudden escalation in medical costs: Medical costs have been steadily rising for years, but the COVID-19 pandemic has led to a sudden spike. New wonder drugs continue to emerge and often cost a fortune. Add to this the cost of getting scarce resources such as hospital/ICU beds and disposables, and we can see that COVID medical treatment now runs up a hefty bill. In case of death, it is the family that needs to part with this sizeable amount. Therefore, it is important to reconsider both life and health insurance in the present scenario. 

A mere increase in the sum assured is not a viable shortcut. It is an obvious decision, but there are several other considerations beyond the sum assured that every woman should consider while revisiting her life and health insurance. Let us see what they are.

Related: 5 Female heroes of the COVID-19 global pandemic

1. Increase the coverage amount

You may have to reconsider the coverage of your health and life insurance based on your present financial and medical situation. If your town is raging with COVID cases, it might be worthwhile to increase your family floater sum assured. Likewise, your life insurance plans should cover the financial liabilities and needs of your family. If you are a working woman, you can use your annual income as a criterion to decide your sum assured. Annual income is likely to increase each year, and so should your sum assured as a multiple of the annual income. The traditional norm is to maintain a sum assured that is ten times your annual income. Policyholders also use the Human Life Value as an indicator of the life insurance cover.

2. Buy suitable policy top-ups

Top-ups are an affordable way of increasing your base coverage in health plans. By paying a smaller amount of additional health insurance premium, you can increase the sum assured to meet escalating medical costs. Even if your medical bill crosses the coverage amount, the top-up will ensure that you remain insured for the excess amount. Similarly, in the case of life insurance, the sum assured may have seemed sufficient at the time of purchase. But with the current global medical emergency refusing to go away, it would may be inadequate. Life insurance top-ups also address new or unexpected financial objectives, like such as a newborn, a wedding, expensive higher education, etc. 

Related: Should housewives buy term insurance?

3. Get critical illness coverage

While the focus on COVID 19 insurance is justified, critical illnesses like cardiac issues, diabetes, hypertension, and cancer continue to rise. Medical emergencies may be a relevant time to reconsider your health insurance’s coverage of these critical ailments. Getting this additional coverage will allow you to opt for more expensive treatments without having to worry about your finances.

4. Ensure savings and investments

Life insurance is an investment of choice to ensure the saving habit and build a retirement corpus. Working women as well as home-makers would need savings to sustain themselves during financially lean periods, and also post-retirement. You should assess if the maturity benefit of your endowment, annuity, or pension plan is enough to meet your medium- and long-term saving and investment needs.

Related: 5 important reasons why women need life insurance

A working woman may look at insurance as a tax-saving investment, while a home-maker may leave it to the discretion of her earning partner. However, the life and health insurance cover of a woman and her family should be purpose-driven. And in these difficult times, the purpose of insurance may have assumed a new significance. See how you can continue with your health insurance policy after marriage.