The impact is not the same for all the lines of insurance. life insurance is staring at huge claims due to the sudden and increased number of deaths, whereas the increased risk of falling sick has made people more conscious of it.
We will look in detail at the impact on commonly purchased lines of insurance.
1) Life Insurance & Lockdown:
The overall effect as of now is negative due to 2 reasons:
- No Sale of fresh policies due to lockdown. In fact, renewal premiums are not received for most of the existing policies. As per the guidelines from IRDA, 30 days extra grace period is allowed to pay the life premium which is falling due during this lockdown. However, no risk during such an expired policy period is assumed by the insurer till the premium is received.
- Increased death claims
2) Health Insurance:
The Health Insurance sector got a rise due to the increased fear of falling sick among the people. Initially, there was a risk to the health insurance sector as well if the treatment expenses were not taken are by the Govt. of India. There could have been huge claims bringing the health insurance sector to losses.
There has been relaxation given to health premiums as well for 30 days in case the due date falls within the lockdown period. However, the risk is not assumed to be covered by insurers until the premium is received. This relaxation is only to benefit the continuation of waiting periods in the medical policy and any such benefit which requires continued cover in the policy.
3) Motor Insurance:
This lockdown has benefited motor insurance greatly as there were no claims.
IRDA has given guidelines that the premiums falling due during the lockdown can be paid till Apr 21st. This is allowed only for the vehicles which are insured for only TP Liability. The risk is also assumed covered during such a period.