You may have to ‘cool off’ post Covid to buy health insurance – The Economic Times

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SynopsisIn most cases they have not made public these cooling off periods. Sales agents have been advised and directed not to sell policies to recently recovered patients, ET has learnt.

MUMBAI: The country’s leading private health insurers Max BupaHDFC Ergo, ICICI Lombard, Care Health InsuranceStar Health and Allied Insurance have all introduced a minimum “cooling-off” period ranging between two weeks to three months for patients recovering from the novel coronavirus.

Insurers in most cases have not made public these cooling off periods. Sales agents have been advised and directed not to sell policies to recently recovered patients, ET has learnt.

Insurance experts and industry insiders say the reason for this is lack of clarity on long-term health impacts of the virus.

Industry insiders, citing documented cases of pulmonary, coagulative and cardio-vascular related complications seen in several recovered patients, said underwriting new policies have become harder.

Moreover, there have also been instances of false negatives.

ET verified the extent of the so-called cooling period by individually calling the tele-sales agent of the insurers mentioned above and enquiring about the new rule on pretext of buying a health cover.

Agents at standalone health insurers Max Bupa and Care Health said they have a minimum cooling-off period of three months where they are not issuing policies.

General insurers ICICI Lombard and HDFC Ergo are not selling policies to recovered Covid-19 patients for a minimum of 45 days from the issuance of negative certificates, their respective agents said. Star Health, meanwhile, has a much shorter 14-day cooling period.

A Tata AIG agent told ET that they will sell the policy albeit exclusions where any Covid-19-related complication would be treated as a “pre-existing condition” which won’t be liable for coverage for up to 3 years.

When reached for comments, a Lombard spokesperson said this is a “precautionary” step keeping in mind manifestation of some pre-existing comorbidities as seen in some cases. A Care Health spokesperson said that is a norm only for recent hospitalisations and won’t impact premium pricing.

A Tata AIG spokesperson said deferments are in the cases of acute infections, while an HDFC spokesperson said the 45-day cooling period is to “evaluate latent complications.”

Dr. S Prakash, MD of Star Health and Allied Insurance, said such exclusions are in place to balance out the disproportionate costs incurred by insurance companies while settling claims during the pandemic.

“The cost of treating coronavirus is nearly three times than that of a normal infection,” said Prakash. “The insurance premiums are calculated very carefully and is heavily regulated…when such events happen these assumptions no longer stay relevant and insurers need to adjust their underwriting to prevent loss ratio from mounting.”

A source in a leading insurance brokerage told ET, in some instances where impact of virus has been adverse on the patient, medical underwriters have advised the insurance companies to not issue policies for up to at least six months. ET could not independently verify this.

As on 10th February nearly 10.9 million cases of coronavirus have been reported in India of which 10.6 million have recovered.

The country’s health insurance industry has cumulatively settled claims worth nearly Rs 10000 crore since the onset of the pandemic.

Experts said that while the documented cases of Covid-19 complications are far and few, new information is emerging everyday making the underwriting of fresh policies even more challenging.

“This is a disease no one completely understands yet,” said Dr Bhabatosh Mishra, director, claims, at Max Bupa. “While some mid-term complications are known, long term effects are still being understood…we took the view to introduce a 90-day period based on publicly available data.”

Insurance experts also suggested that pre-existing comorbidities can become exacerbated in some cases. People with long term ailments could also be more at risk, said Priya Deshmukh Gilbile, Chief Operating Officer (COO), Manipal Cigna Health Insurance.

“Existing comorbidities such as hypertension, cardiovascular disease, diabetes and respiratory diseases, amongst others, are at a much greater risk of complications. Not all comorbidities confer the same risk, however. Many affect the function of the immune system, which in turn directly impacts the response to Covid-19 treatment,” Deshmukh added.

According to Amit Chhabra, head- health insurance, Policybazaar, the worst is over for the insurance industry and most complications arising out of coronavirus would be covered under existing medical policies. Only those purchasing new covers may face certain stipulations subject to the new underwriting norms being devised by the insurers.

“While the claims were high during the peak of the pandemic, health insurers also saw a sharp increase in demand for new policies. Most losses have been balanced out,” he added.

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