How COVID-19 Changed Health Insurance Needs
The baleful COVID-19 pandemic has created a profound impact in every sector, including the insurance sector in India. Now, everyone has started realizing the significance of a health insurance policy. Thus, people are dashing to purchase various health policies like COVID-19 or corona health insurance plans to protect against this deadly pandemic. To cope up with this ever-increasing demand, many health insurance companies (both individuals as well as corporates) are introducing new products like health insurance for COVID-19 or tweaking their existing ones so that everyone gets sufficient coverage against this virus.
Top 5 ways how the COVID-19 pandemic changed Health Insurance Needs
- Enhanced Awareness about Health Insurance
- Increase in Sum Insured
- More focus on benefits and exclusions
- A rise in digital adoption
- Innovative Health Insurance Plans
Enhanced Awareness about Health Insurance
This COVID-19 pandemic has forced people to contemplate their health. By purchasing health insurance policies, they can combat unforeseen medical emergencies. People are panicking because their finances are getting drained due to COVID-19 hospitalization treatment. This has inspired people to understand the necessity of having the best individual health insurance. Though people can borrow money from their friends or acquaintances or withdraw from their savings, this conventional payment method won’t work for large hospitalization expenses due to the COVID-19.
Thus, people have become aware of both individual and family floater policies and are purchasing these plans to stay protected in the best possible way against the COVID-19. Even conglomerates and private companies are paying attention to their employees’ health and are offering corporate group health insurance policies. Post COVID-19, no. of queries and sales of health insurance drastically increased. Last year, many people opted for pandemic health insurance policies that are exclusively designed for COVID-19. After seeing the rising demand for COVID-19 policies, regular health policies have also started to offer cover for COVID-19 related hospitalization.
Increase in Sum Insured
The COVID-19 hospitalization treatment could cost lakhs of rupees or even more. Thus, people are purchasing health policies of a higher sum insured that will help them to deal with situations like COVID-19. Let’s understand it with an example.
Rajesh (28-years-old) lives in Indore and works in a private organization. Rajesh is unmarried and purchased a health insurance policy of R. 3 lakh two years ago. One of Rajesh’s close friends was infected with the COVID-19 and admitted to a private hospital. The hospital handed him a bill of Rs. 2 lakh for his COVID-19 treatment. This was an eye-opener for Rajesh, and he felt that his policy would not offer him adequate coverage against this deadly virus. Thus, Rajesh increased the sum insured amount at the time of renewal to stay protected and worry-free financially during this pandemic situation.
Many people also increased their sum insured during this global pandemic to strengthen their safety and protection. These days, instead of purchasing a policy of Rs. 3-5 lakh, people are purchasing higher sum insured policies of Rs 25 lakh. Some are even buying a sum insured of Rs 1 crore to reduce their financial stress during COVID exigencies.
By purchasing top-up and super top-up plans, existing policyholders can increase their sum insured without stretching their premiums. Nowadays, customers are looking for a higher sum insured policy as compared to pre-COVID days. These higher sums insured policies come at an affordable base policy along with a top-up or super top-up plan.
Even employers are also looking for higher sum insured policies for their employees and dependents so that these policies can bear the higher amounts of hospitalization expenses due to the COVID-19.
More focus on benefits and exclusions
Before COVID-19, people used to purchase health insurance policies without evaluating their long-term needs and expectations. After COVID-19, people are buying health insurance policies carefully. Policy buyers are looking for more information and checking features of their plans and lifetime benefits to ensure that their handpicked policy offers them adequate coverage for their lifetime.
Customers are seeking information about specific features, including hospitalization costs, pre-existing diseases, room rent, and other ancillary expenses. Because most health insurers offer sub-limits or clauses for these expenses. Nowadays, customers know that their medical claims might get declined as a result, and insured policy members need to pay everything from their pockets that can drain out their savings.
A rise in digital adoption
This COVID-19 pandemic has enforced social distancing guidelines to minimize physical interaction. As a result, people are purchasing health insurance online instead of depending on agents. The pandemic has forced insurance companies to focus on digital channels rather than conventional channels. Now, insurance companies are adopting smart technologies and are streamlining their processes so that customers don’t face any problems while purchasing and renewing health plans online.
Now, customers can compare various plans online and select the best plans that meet their requirements and needs. Moreover, digital payment methods such as e-wallets, net banking and credit cards, etc., make electronic transactions more convenient and hassle-free.
Customers prefer cashless settlements for claim initiation and settlement as they are done through electronic means. Even insurance companies and TPAs are reimbursing claims based on scanned copies of claim documents.
Innovative Health Insurance Plans
Health insurance companies are launching many COVID-19-specific policies like Corona Kavach and Corona to make their portfolio diverse amid this pandemic. Companies are also introducing other plans that will consider varying healthcare requirements of the insured members. In addition, many health insurance companies are including OPD cover in the form of add-on coverage to their policyholders.
These 5 are some notable trends causing shifts in the health insurance sector due to the COVID-19 pandemic. Although the COVID-19 pandemic remains dominant in many parts of the world, people will experience other patterns emerge in the health insurance industry.