Term Plans with COVID-19 Riders
The coronavirus pandemic has affected the whole world. And, India is among the worst-hit countries. It is still unclear what the long-term effects of the pandemic could be.
This has led to uncertainty about finances in the future.
In such a scenario, the importance of having a term life insurance increases, to provide a financial shield for you and your family.
A COVID-19 diagnosis can lead to a disruption in routine activities. The medical expenses for the treatment can drain your finances and put your financial planning in jeopardy. And, in the worst case, a person diagnosed with Covid-19 could become the victim of an untimely death.
Adding a COVID-19 rider to your term plan can make your policy more comprehensive in these troubled times and ease your mind. Term insurance does cover death due to Covid-19, however, if you want to widen the coverage of your term plan, insurers are coming up with Covid-19 riders to meet such specific requirements.
Here are some popular term plans along with a COVID-19 rider, so that the life assured does not have to worry about the finances or the costs of medical treatments if the life assured is diagnosed with COVID-19.
1. Max Life Insurance
Max Life Insurance provides a COVID-19 rider with a term of one year.
To buy this rider, there is a waiting period of 15 days after the approval of the policy. That is, the benefits can be availed only 15 days after buying the policy. In case the insured is diagnosed with the coronavirus, or dies from the same within these 15 days, there will be no benefits payable to the insured or the nominees under the rider.
| Features | Details |
|---|---|
| Entry Age | Minimum Age: 18 years Maximum Age: 65 years |
| Type of Premium | Single-Premium |
| Minimum Premium | INR 271 |
| Maximum Premium | INR 2710 |
| Minimum Sum Assured | INR 1 Lakh |
| Maximum Sum Assured | INR 10 Lakh |
Benefits Under this Rider
- If the insured is diagnosed with the coronavirus, 20% of the total sum assured is paid to him as a lump sum. The life assured can use this lump sum to pay for the treatment costs and other expenses. Thus, the life assured would not have to worry about the medical bills and the strain it can put on the finances.
- If the insured dies because of the coronavirus, and if the death occurs within the coverage term of the rider, then the entire sum assured is paid immediately to the nominee as a lump sum. They will also receive a diagnosis benefit over 100% of the assured death benefit. This will help the family and other dependents to sustain their living in the absence of an income.
Termination of the Covid-19 Rider Under Max Life Insurance
The rider can be terminated if the insured decides to cancel it, in the event of the death of the insured, or if it is determined that false medical information has been provided. Furthermore, it will be automatically terminated on the expiry of its term.
2. Aegon Life Insurance
Aegon Life Insurance allows you to have a term plan along with a COVID-19 insurance cover.
There is a waiting period of 14 days after the approval of the policy. If the insured is diagnosed with the coronavirus within this period, no benefit under the COVID-19 is payable.
| Features | Details |
|---|---|
| Entry Age | Minimum Age: 18 years Maximum Age: 50 years |
| Type of Premium | Single-Premium |
| Minimum Premium | INR 360 |
| Maximum Benefit Assured on Hospitalization | INR 5 Lakh |
Exclusions Under this Plan
- Suicide Exclusions
If the insured commits suicide, 80% of the total value of the premiums paid is refunded to the nominees or to the family. The death has to happen within twelve months from the date of commencement of the policy (Date of Commencement of Member) , or twelve months from the date of renewal of the Member coverage. The death should be within the policy term.
- COVID-19 Exclusions
A person opting for this term plan with the COVID-19 rider should not have travelled anywhere outside of India for 45 days before he applies for the policy. He should not have been under mandatory quarantine. He should not have had any close contact with a person diagnosed with the coronavirus in the last 14 days before the proposal of the policy. He should not have any symptoms of the coronavirus, such as fever, cough, shortness of breath, sore throat, nausea, vomiting, and diarrhoea in the last 14 days before he applies for the policy.
3. Star Union Dai-ichi
Star Union Dai-ichi also offers a term life plan with a COVID-19 rider. This policy also has a waiting period of 15 days from the date of risk commencement. If the insured is diagnosed with the coronavirus within this period, he/she isn’t liable for any benefits.
| Features | Details |
|---|---|
| Entry Age | Minimum Age: 18 years Maximum Age: 55 years |
| Maximum Maturity Age | 58 years or on the maturity of the base policy, whichever comes first |
| Type of Premium | Single-Premium |
| Minimum Premium | INR 1800 |
| Maximum Benefit | INR 1 Lakh to INR 4 Lakh |
| Policy Term | 3 years |
Benefits Under this Rider
- If the insured is diagnosed with COVID-19 and is hospitalized for more than 24 hours, 25% of the total sum assured will be given to him as a lump sum. This additional benefit is only paid once and after the payment, the policy will continue as usual. It should be noted that if a person has only acquired the coronavirus and is not hospitalized, he/she will not get any hospitalization benefit.
- If the insured dies due the coronavirus while the rider is active during the tenure, the entire death benefit amount will be paid to the nominee(s), or the family, and the policy will be terminated. The diagnosis and hospitalization benefit will also be paid, which means maximum benefit can be 125% of the total sum assured.
Exclusions Under this Rider
- Suicide Exclusion
If the insured commits suicide within 12 months of the commencement of the plan, the nominees will get 80% of the total value of all the premiums paid, provided the death occurs within the coverage term.
- Travel Exclusions
If the insured travels outside of India, there is a waiting period after he/she comes back. If she is diagnosed within this waiting period, he/she will not be liable to any benefits under this rider.
- Others
If the insured is hospitalized for any other illness, or death due to an accident, or is quarantined under the directions of any unauthorized centre, and if he recovers from coronavirus but dies from any other cause later, no benefits will be paid.
Termination of the Rider:
The rider can be terminated on a request of cancellation, and on its expiry. If the COVID-19 benefits are paid once, the rider is terminated. However, the term life insurance policy continues. The policy along with the rider is terminated on the death of the insured.
Key Takeaways
Life with a pandemic raging outside can be very uncertain. Anyone can catch the coronavirus, and if the symptoms become serious, the person might need to be hospitalized. If your insurance does not cover the treatment for the coronavirus, the medical expenses can have a serious impact on your savings and your future planning. Max Life and Aegon Life are the two term insurances that provide a comprehensive term life insurance policy for you and your family. If you are someone who needs to travel to work every day, getting a term plan with a specific COVID-19 rider might be a good idea. In case you decide to purchase a policy, you should always make sure that you are thoroughly aware of the finer details, and terms and conditions of the policy.