Topic 3: How has buying insurance post outbreak of Covid-19 changed

The importance of insurance has grown multifold in recent times. With hospitalization expenses running into lakhs during the treatment of coronavirus, many families had to either borrow from friends, relatives or dip into their savings to meet the cost of hospital bills. Even an untimely death in a family left many families financially stranded in the absence of adequate life insurance coverage.

While the importance of insurance has increased and the need to go for an insurance policy is felt more than in the past, are people actually moving on in the right direction? To find out how the buying behavior and the perception towards insurance have changed especially after the outbreak of Covid-19.

As a result of the pandemic people are more actively asking about and buying insurance. This is a positive development but there are also some areas to be watchful about.

Many who would have dismissed insurance previously are more aware of their own fragility. They are enquiring about insurance and more willing to buy quickly. Whereas previously a large number of potential buyers would request multiple meetings and calls before making a purchase they are now willing to buy online or based just on phone conversations.

The questions people ask are also more searching and based on their personal experiences. Buyers now want to get into the details of coverage.

Typically, 5% of the people insured, fall ill and claim insurance in a given year. During the pandemic this proportion increased. So, many policyholders have experienced claims at close quarters and are more aware today about the process of claim settlement.

Insurers pay a large number of claims but there are two issues specific to covid that have come up.

First, hospital charges for covid in many cases are more than the insurer’s own recommendation of standardised tariff. In such cases insurers pay their prescribed rates but hospitals charge their own rates from patients. So, patients pay out of pocket for no fault of theirs. I have seen cases where the insurer cited a government notification on hospital tariffs to pay a lower amount. However, we had to point out that the government notifications were only applicable to about 70% of the hospital beds and the hospitals could charge their own rates on remaining beds. In such cases the claims were then paid.

Sometimes covid claims have been repudiated on the ground that hospitalisation was not warranted. However, patients generally follow the instructions of a treating doctor. Such cases when escalated to the ombudsman get paid but it is a time consuming process.

A third issue has been that patients have not been able to obtain original or paper copies of various bills and medical documents. For a brief period insurers accepted soft copies but now are gradually returning to the need for hard copies to be sent to them.

These issues are getting streamlined and there are some steps that can significantly increase claim settlement. These are to opt for cashless claim settlement, inform the insurer in advance of a treatment, avoid unnecessary hospitalisation to convert an OPD procedure to IPD and escalate the claim to the ombudsman if aggrieved.

Cashless claims put a time pressure on insurers to complete the approval before discharge. This works to a patient’s advantage because the alternative which is to claim reimbursement can often take time as you put together bills and answer the insurer’s queries.

Do go to a hospital with a well-functioning TPA or insurer helpdesk. Informing the insurer about hospitalisation is useful because the insurer has time to react and ask you questions beforehand. Be clear that insurance does not pay for OPD procedures unless that is specifically a product benefit listed out. Often patients will get hospitalised for procedures that do not require such care. These claims are unlikely to be passed.

Finally, if you are sure about your claim then see it through by going to the grievance cell or take your case to the ombudsman if it is rejected. The ombudsman is policyholder friendly and payable claims get paid.
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