Does Your Life Insurance Plan Provide Protection Against COVID-19?

The COVID-19 pandemic caused havoc on an unfathomable scale. Millions of people lost their lives and their livelihoods, leaving many with an uncertain future. The pandemic also exposed the inability of the healthcare system in handling a medical crisis of such magnitude. The images of people waiting outside hospitals to get treatment forced many people to purchase health insurance for themselves and their family and get protection from COVID-19. However, do life insurance plans provide the same protection as a health insurance plan would from COVID-19? Read on to see if life insurance provides protection from COVID-19.

What is life insurance?

Life insurance is a type of policy in which the beneficiaries related to the insured, i.e, the policyholder, gets financial assistance in the event of the policyholder’s sudden demise. The policy signifies an agreement between the insurer and the insured. The beneficiaries get a death benefit which helps them to manage their day-to-day expenses without the risk of facing financial uncertainty.

How does life insurance protect you from COVID-19?

When you purchase a health insurance plan, it provides you and your family financial assistance for the cost of medical treatment. Expenses such as hospitalisation, medicines, room charges, etc are covered by the health insurance plan. In such plans, even the expenses related to COVID-19 are covered.

However, this insurance only covers the medical expenses. What if the person being treated were to pass away due to the disease? And what if that person happened to be the policyholder? This could put the family of the insured in financial turmoil as they would have no viable source of income to manage their daily life.

In such situations, life insurance plans come in handy. If the policyholder were to pass away during the treatment or post-treatment complications, the policy will compensate the family of the insured. This compensation is known as life cover. The amount that paid to the beneficiaries helps them in managing vital expenses while at the same time helping them plan a secure future.

How does life insurance work in COVID-19 situations?

In a life insurance, the beneficiary of the insured get compensation from the insurer. When the beneficiary files a claim, the insurer studies the claim. Based on the cause of death and the medical history of the policyholder, the insurer will decide whether or not to accept the claim and compensate the beneficiaries.

In case of COVID-19, if the policyholder passes away due to the disease, it is considered as a natural death anyway. So, if the beneficiary files a claim for compensation from the insurer, the insurer will provide compensation to the beneficiaries on the basis of the demise caused due to a disease. However, if during examination, the insurer any other medical condition or pre-existing illness was hidden at the time of purchase of the policy, the claim will get rejected.

On the other hand, if you are planning to buy a new life insurance policy, you should opt for a COVID-19 life insurance policy. Post COVID-19, life insurance companies started offering coverage for people who passed away due to the disease. In such situations, the chances of claims rejected on the grounds of demise due to COVID-19 will be lower.

What are the other ways a life insurance provides COVID-19 coverage?

Life insurance comes with different types of add-ons that you can include in your policy. One such add-on that you should definitely need to add is the critical illness benefit add-on. If COVID-19 is covered under this add-on, the insurer will pay the death benefit to the beneficiary of the policyholder. However, do keep in mind that in order to be eligible for the pay-out, your insurer might require certain conditions to be met.

This is how your COVID-19 life insurance policy could provide your loved ones the financial protection they deserve. You can get in touch with a life insurance company or your insurance advisor to know more about policies providing COVID-19 coverage. Similarly, you can discuss other types of life insurance policies that you can look to invest into for your loved one’s secure future.