As claims rise, insurers go slow on covering Covid-recovered

Most insurers are iffy about on-boarding customers who have just recovered from Covid, said an insurance sector official. “As a result, insurers have put a cooling off period of 3-6 months after Covid detection,” he said.

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With the daily number of Covid cases rising steeply, insurance companies are refusing to give health cover to persons recovered from Covid-19 and are asking them to wait up to six months for renewal of policies.

Most insurers are iffy about on-boarding customers who have just recovered from Covid, said an insurance sector official. “As a result, insurers have put a cooling off period of 3-6 months after Covid detection,” he said.

The delay in renewals has come amid reports that insurers are refusing to pay up in many cases despite the directive of the Insurance Regulatory and Development Authority of India (Irdai) that hospital bills under the ‘cashless system’ will have to be settled within two hours of discharge. “There are even complaints that some insurers are refusing to issue new Covid policies to persons without any illness fearing a spurt in claims,” said a source.

According to government data, there are 1.87 crore confirmed Covid cases in the country, of which 1.53 crore have recovered. These people may have to wait for some time before getting themselves covered again. “A cooling off period is to ensure that customers have recovered completely, (and they) are not experiencing any immediate side effects of the infection and are in optimum health at the policy proposal stage. As most Covid survivors only experience mild symptoms, availing insurance cover should not be a problem,” said Anand Roy, managing director, Star Health and Allied Insurance.

“This means one can buy a health insurance policy only after 3-6 months of having turned Covid negative. Given the rate at which Covid is spreading right now, it’s advisable for all to get a health insurance plan now, and don’t wait, because in case one gets Covid, it will become difficult to get the health insurance plan immediately,” said Amit Chhabra, head-health insurance,

The second Covid wave has led to an unprecedented surge in new infections. “Given the lack of clarity around the severity and virulence of this mutant, it is advisable to stay safe, take precautions and have yourselves covered under the umbrella of health insurance. Considering the rapid spread of new variants of Covid-19, it is hard to say anything about the long-term effects of it,” Chhabra said.

According to Roy, Covid-19 is a new disease and there is yet a lot we need to understand about this illness in ascertaining long-term effects on a person’s health. “In the past, we’ve seen patients who have recovered from Covid-19 experience a reinfection or have other complications. This is exacerbated when the patient has comorbidities. Underwriting of such proposals is more case specific, individuals with or without co-morbidities, extent of treatment and sequel of Covid,” Roy said.

Meanwhile, insurance companies settled only 54 per cent of the claims received from the customers who have taken Covid health insurance as of March 2021. Of total claims of Rs 14,608 crore under the Covid health insurance schemes, insurers settled only claims worth Rs 7,900 crore, which is 54 per cent of the amount claimed by the insured people.

On top of this, while 9,96,804 people made claims as of March 2021, insurers settled the claims of 8,55,250 people, leaving out 1,41,554 people who are yet to get the money from insurance companies, according to figures available with the General Insurance Council.

“A major chunk of the insurance claims is cashless and settled by the insurance company on the day the patient is discharged. If 1.41 lakh patients whose claims are yet to get the money from the insurance company, that’s something that insurance regulator Irdai should look into and issue an advisory,” said an insurance sector official. A common complaint from the customers is that insurers drastically cut down the claim amount on some flimsy reasons and many of them, including public sector firms, refuse to reimburse money to policyholders.

However, insurers said many claims are inflated bills that don’t come under the terms and conditions of the policy. As many as 66.37 per cent of total claims under the Covid health insurance policies are from five states, with Maharashtra accounting for the maximum number of claims. During the 12 months ended March 2021, insurance firms reported an 18.11 per cent increase in health insurance premium income to Rs 58,584 crore. Of this, retail customers accounted for Rs 26,258 crore and group policies amounted to Rs 27,750 crore.

Two corona-specific products — Corona Kavach and Corona Rakshak — were launched by insurers under the guidance of Irdai.

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