Impact of COVID-19 On Health Insurance Sector In India
Table of Contents
In India, just like all other sectors of the economy, the health and wellness sector was also transformed during COVID-19. There are uncountable challenges and various shining impacts have occurred in the health insurance industry. Health insurance companies play a significant role in transforming and adjusting to the new norms of COVID-19. The COVID-19-specific health insurance plans have been included in the regular health insurance plans by the insurers for the policyholders.
An online course or a virtual consultation has been a trend during COVID-19. Likewise, the health insurance sector has also turned the wheel by offering plans and policies online. Now, an individual can easily choose, buy, renew, and claim a health insurance policy online through the official website of the insurer.
The demand for health insurance plans has increased dramatically over the last few years as people have come to realize the importance of financial backup to cater to medical emergencies. Even in times of economic burden on the industries, the health insurance sector has made its way out and has evolved with the requirements of the customers and changes in the world.
Impact of COVID-19 On the Health Insurance Sector
COVID-19 was not fruitful for other sectors. However, it was a golden period with a lot of challenges for health insurance companies. Following are some of the key points which indicate the impact of the coronavirus pandemic on the health insurance sector of India:
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Claim Payouts
IRDAI has mandated and instructed the health insurers to include COVID-19 covers in their regular health insurance plans for all policyholders.
Since the treatment of coronavirus has not been included under the active products, these claims made by the customers are additional burdens on the books of the insurers, especially when not treated at government hospitals. The insurers have to recalibrate their finances as the number of claims for other diseases has also increased as people suffering from critical diseases like diabetes, respiratory disorder, etc. are more prone to get diagnosed with coronavirus. Besides this, health insurance companies had to face devastating liquidity challenges due to the extension of 30 days in the grace period.
Must Read: Future of Health Insurance After COVID-19
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Development of Products
The health insurance sector has made certain developments and transformations in its health insurance products. To meet the growing demands and requirements of the policyholders, some insurers have launched separate additional benefits, while others have included these covers under the regular health insurance covers. The modified health insurance plans cover a variety of features such as waiting period, wide-coverage, expenses for protective gear, and more
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Flourished Demand and Sale
During COVID-19, the people realized the importance of financial security for medical emergencies. Hence, the demand for health insurance plans has immensely grown up. Many people are investing in health insurance policies to protect themselves and their loved ones against critical disease or any injury. Insurance companies offer a variety of plans among which an individual can choose and buy the best as per their requirement.
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Reserve Requirements
Another big challenge that health insurance companies faced during COVID-19 are reserves held by the government. Due to the economic stress of the global pandemic, the government of India has reduced the repo rates and bond interests, which can potentially lead to challenges in maintaining the reserves, credit risks, liquidity risks, etc.
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Premium Payments In Installments
After the COVID-19 pandemic, health insurance companies have enabled customers to pay their premium payments in instalments. This feature was launched by health insurance providers to aid policyholders in avoiding the exhaustion of their finances and provide a health insurance plan with a high sum of assured coverage. The premium can be paid in quarterly, half-yearly, monthly, or annual instalments.
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Digital Transformation
Just like all the other sectors, during COVID-19 health insurance sector was also transformed digitally. All the processes like KYC or any other documentation are now initiated online. This change implemented by health insurance companies has made it convenient for customers to buy health insurance policies.
Conclusion
The global pandemic has brought in a lot of changes in different sectors across the country, one of which is the health insurance sector. The health insurance sector has transformed positively in a lot of aspects but at the same time has also faced some challenges, but it continues to serve its policyholders with modesty and sincerity.
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