Life Insurance And Covid: What Cover Does Your Term Offer?

The COVID-19 pandemic has brought about a lot of uncertainty, and many people are looking to secure term insurance while they are still healthy. Term insurance is a pure protection plan that offers financial security to your family in case of your demise during the policy tenure.

If you already have a term insurance policy, you can be assured of your family's financial security, even if COVID-19 takes a severe toll on your health. Existing term plans cover COVID-19-related deaths, and your family will receive the sum assured at the time of claim settlement.

If you don't have a term insurance policy, you can still buy one to protect your family from the financial distress caused by the virus. Term insurance with critical illness riders can help protect you if you are diagnosed with a major ailment such as heart disease, kidney, or liver issues. When you buy critical illness insurance plans, your family gets an assured sum, which can help them cover the cost of your treatment. If the critical illness leads to your demise, the family also gets the death benefit.

When investing in a term plan, the insurance company will assess your premiums as per your present health condition and after careful analysis of your medical history. If you do not have COVID-19 at the time of policy purchase, the term policy will cover you in case you contract the disease later. However, if you have the virus at the time of policy purchase, your insurance company might not approve the plan.

Term insurance with COVID-19 cover

Term insurance is the most basic form of life insurance, providing financial coverage for a specific number of years. In the event of the policyholder's death, the beneficiary or nominee receives a death benefit that can help cover living costs such as healthcare, food, education, and clothing. Term insurance is essential for securing your family's financial future.

During the COVID-19 pandemic, the importance of having term insurance with COVID-19 coverage has become even more evident. Here are some key points to consider regarding term insurance with COVID-19 cover:

• Death Benefit: Term insurance with COVID-19 cover includes death caused by COVID-19. The nominees will receive the sum assured in the event of an untimely death due to the virus.
• Diagnosis and Hospitalization Cover: COVID-19 insurance provides financial protection before and after contracting the virus. It covers diagnosis and hospitalization expenses related to COVID-19.
• High Sum Insured: Term insurance plans offer a high sum assured compared to other life insurance plans at a low premium. Choose a significant cover to ensure your family's financial security.
• Inclusive Coverage: COVID-19 can affect anyone, so it is crucial to have inclusive coverage. Do not take the risk of facing a future financial and medical crisis without adequate protection.
• Premium Considerations: When purchasing COVID-19 insurance, consider factors such as your health, age, risk cover selected, and overall well-being, which can impact the premium.
• Waiting Period: Most term insurance policies have waiting periods for certain diseases, but COVID-19 is typically not subject to long waiting periods. Confirm the waiting period with your insurer.
• Claim Settlement Ratio: Opt for insurance companies with a high claim settlement ratio, indicating their reliability in settling claims promptly. Max Life Insurance, for example, has a claim settlement ratio of 99.65%.
• Longer Tenure: Choose a term insurance plan with a longer tenure to ensure long-term security. Most plans offer coverage for 10 years or more.
• Limitations: COVID-19 insurance may have limitations, such as specific inclusions related to the virus and varying premiums across insurers.

Term insurance with critical illness rider

• Lump-sum Payout: The rider provides a lump-sum payment to the policyholder upon diagnosis of a critical illness. This amount can be used to cover medical bills and treatment costs.
• Enhanced Coverage: The rider enhances the coverage of the base term plan by providing protection against critical illnesses such as heart disease, cancer, stroke, kidney failure, and more.
• Income Replacement: In case the policyholder is unable to work due to a critical illness, the payout from the rider can serve as income replacement, helping to cover living expenses and financial obligations.
• Affordable Premiums: The premium rates for the critical illness rider are generally affordable and can be easily added to the base term plan.
• Tax Benefits: The critical illness rider provides additional tax benefits under Section 80D of the Income Tax Act, 1961, on top of the regular tax benefits of the base term plan.
• Wider Range of Coverage: The rider covers a wide range of critical illnesses, and the specific illnesses covered may vary depending on the insurer and the policy.
• Eligibility: Individuals with a history of critical illness in their family, sole earners, individuals with high-pressure jobs, and those over 40 years of age may find this rider particularly beneficial.
• Claim Process: The claim process for the critical illness rider is straightforward. The policyholder needs to submit the insurance company's claim form along with relevant medical certificates and reports confirming the diagnosis of the critical illness.

Term insurance with diagnosis and hospitalisation cover

Term insurance is a basic form of life insurance that provides financial protection for a specific time period in exchange for a fixed premium. Term insurance plans are designed to safeguard your loved one’s financial well-being in your absence.

• Diagnosis and Hospitalisation Cover: This type of term insurance covers the cost of medical treatment and hospitalisation expenses in case you are diagnosed with a critical illness. It provides a financial safety net, so you can focus on your health and recovery without worrying about medical bills.
• Death Benefit: In the unfortunate event of your death, your nominee will receive the sum assured, which can help cover living expenses, such as food, clothes, healthcare, education, and more.
• Critical Illness Protection: Term insurance plans may also offer protection against critical illnesses like heart attack, cancer, and kidney failure. This coverage can help with treatment expenses or compensate for lost income, providing financial relief when you need it most.
• Disability Support and Benefits: Accidents can cause temporary or permanent disability. A term plan with a disability rider provides financial support for your family and ensures that future premiums are covered.
• Additional Benefits Through Riders: Term insurance plans often include riders or add-ons, such as critical illness riders and accidental disability riders, which provide extra protection and financial security.
• Tax Benefits: Term insurance plans may offer tax advantages. For example, you can deduct premiums from your taxable income under section 80C of the Income Tax Act, 1961. Additionally, any payouts received by you or your nominee are usually exempt from taxes.

When considering term insurance with diagnosis and hospitalisation cover, it is important to carefully review the policy documents to understand the specific benefits, exclusions, and conditions. It is also essential to choose a reputable insurance provider with a high claim settlement ratio to ensure timely and efficient handling of any claims.

Term insurance with death benefit

Term insurance is the simplest form of life insurance, providing financial protection for a specific time period, or 'policy term', in exchange for a fixed premium. In the event of the policyholder's death, a beneficiary or nominee receives a death benefit to help cover living costs such as healthcare, food, education, and clothing.

Term insurance with a death benefit is a pure term insurance plan that provides a financial benefit only in the event of the policyholder's death during the policy term. If the policyholder outlives the policy term, there is no payout or return of premiums. However, some term insurance plans offer a return of premium option, where the policyholder can receive their premiums back at the end of the policy term.

The death benefit from a term insurance plan can help the beneficiary or nominee maintain their current quality of life. It can cover funeral costs, debts, and living expenses, providing financial security and peace of mind during challenging times.

When purchasing a term insurance plan with a death benefit, it is important to understand the types of deaths covered and excluded from the policy. Term insurance typically covers death due to natural causes or health-related problems, including critical illnesses and natural calamities. It also covers accidental death, which is defined as a sudden, unforeseen, and involuntary event.

However, there are certain limitations to the coverage provided by term insurance plans. Here are some types of deaths that are generally not covered:

• Death due to suicide, usually within the first year of the policy
• Death due to self-inflicted injuries or hazardous activities
• Death while driving under the influence of alcohol or drugs
• Death due to undeclared pre-existing diseases
• Death due to participation in illegal activities or criminal activities
• Death due to adventure sports or activities
• Death due to childbirth
• Death due to homicide, if the nominee is responsible or if the policyholder was involved in criminal activity

Term insurance with long-term security

Term insurance is a type of life insurance that provides financial protection for a specific time period, known as the "policy term". In the event of the policyholder's death during this term, their beneficiary or nominee receives a death benefit that can help cover living costs such as healthcare, education, and more. Term insurance is a simple and affordable way to secure your family's financial future, especially during uncertain times like the COVID-19 pandemic.

• Choose a Reputable Company: Opt for well-established insurance providers with strong financial strength ratings, such as those with an A+ or A++ rating from A.M. Best. This ensures that the company has the ability to pay out claims in the long run.
• Long-Term Protection: Look for term insurance plans that offer coverage for an extended period, such as those with terms of 10, 15, 20, or even 30 years. This ensures that you have financial protection in place for a significant portion of your life.
• High Sum Assured: Select a term plan with a high sum assured to adequately cover your family's financial needs in your absence. Consider factors such as your income, existing debts, and future expenses when determining the coverage amount.
• Conversion Options: Choose a term insurance plan that offers the flexibility to convert it into permanent coverage in the future. This allows you to extend your protection beyond the initial term without having to purchase a new policy.
• Long-Term Care Rider: Consider adding a long-term care rider to your term insurance plan. This provides additional coverage for long-term care expenses, such as in-home care, assisted living, or nursing facility costs.
• Customer Experience: Opt for insurance providers with a strong track record of customer satisfaction and minimal complaints. This ensures that you will have a positive experience throughout the policy term and during the claims process.
• Affordable Premiums: Compare premiums from different insurance companies to find the most cost-effective option. Term insurance is generally more affordable than permanent life insurance, but it's important to ensure that the coverage meets your long-term needs.

Frequently asked questions