2 min read.Updated: 14 Jan 2022, 01:34 PM ISTLivemint
During 2020-21, LIC gave over ₹442 crore as reinsurance premium, up from ₹327 crore in the previous fiscal
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Amid the third wave of Covid-19 in the country, people who have recovered from the deadly infection will have to wait for a little to buy life insurance for themselves. As per the new rule, people who have recovered from coronavirus infection will have to wait for up to three months before they can take a new life insurance policy. This is because several insurers have decided to make the waiting period requirement applicable for Covid cases like any other ailments.
Until now insurance companies had the waiting period requirement for various ailments and coronavirus infection is one more ailment they have added to that list.
Industry experts told the PTI news agency that they have implemented the waiting period against the backdrop of a high mortality rate related to coronavirus infection.
Reinsurers have asked insurance companies to bring coronavirus infection cases also under the standard waiting period norms as high mortality rates have impacted the reinsurance business.
Reinsurance players provide cover for insurance policies issued by insurers.
Sumit Bohra, President of the Insurance Brokers Association of India (IBAI), said Indian insurers cannot write all these risks. So, most of the insurance policies that are above ₹10-20 lakh are reinsured and the reinsurers want "good risk to come into the system" due to which the waiting period has been made applicable for coronavirus infection cases also.
According to Bohra, coronavirus infection has also been included in the list of ailments where the waiting period will be applicable since the mortality rate is high due to the infection.
"Previously, the mortality rate was less and there was acceptance for more risk. Any amount of premium is not good enough to pay the claims if the mortality rate is going to be high. With COVID, it is not like a simple cold or flu.
"It is damaging other parts/ organs of the body as well, especially the lungs. So, it is difficult to gauge the survival rate if a policy is being issued for a longer period," Bohra said.
the waiting period condition for people who have recovered from coronavirus infection will be applicable only on life insurance policies, and not health, Yogesh Agarwal, Founder, and CEO of Onsurity said. Also, it will apply to only new retail customers and the existing policyholders will not be impacted in any manner, he added.
During FY21, the country's largest life insurer LIC gave over ₹442 crore as a reinsurance premium, up from ₹327 crore in the previous fiscal. Private sector players together ceded ₹3,909 crore as a premium towards reinsurance, up from ₹3,074 crore in the preceding financial year.