How will the corona virus third wave affect life insurance? Here are some important facts that you should know. For instance, what will happen to the cost of term plans and funeral cover if there is a corona third wave? How will the waiting period for cover be affected? And what can do to reduce the risk? Find out in this article. After all, your family will need all the financial support they can get.
Impact of the corona virus third wave affect life insurance on life insurance
The sudden surge in cases of Covid-19 is having a negative impact on life insurance policies in India. Insurance companies have decided to include the condition in the waiting period for policyholders infected with the disease. The virus has a high mortality rate and damages organs such as the lungs. Because of this, insurers have accepted this risk by increasing premiums. The condition also affects the reinsurance business, which insures insurance policies issued by insurers.
The second and third waves of the Covid-19 pandemic occurred in April and May of last year. The third wave was drive by the Delta variant. This wave was the worst for life insurance in South Africa, with death claims almost 50% higher than in the pre-Covid period and rand claims 120% higher.
A representative of the Association for Savings and Investment South Africa, which represents the life insurance and collective investment industry, provided statistics on the life claims made during the third wave of the virus. Hennie de Villiers, deputy chair of the Asia Life and Risk Board Committee, told the meeting that the statistics would help the industry prepare.
Cost of term plans
The sum assured amount in a term plan is a crucial document. The sum assured should be at least ten times your yearly income, with a minimum of Rs 1 crore. But, this number varies according to your age and stage of life. Your liabilities increase with marriage, children, and education. Therefore, if you are between the ages of 25 and 45, you should buy a term plan with a sum assured of at least fifteen times your annual income.
Waiting period for cover
Insurance companies have increased the waiting period for Corona patients to reduce their mortality risk. The virus is a bacterium with a high mortality rate, but insurance companies accept the risk because it is not a cold that only affects the lungs. The virus damages other organs, so the longer the waiting period, the greater the risk. Insurance companies have opted to extend the waiting period to people with coronavirus infections, but it will likely affect life insurance policies.
