Coronavirus pandemic | Don’t worry! No COVID-19 death claim will be rejected, assures insurance body

The coronavirus (COVID-19) pandemic, that has led to 109 deaths in the country, has led to a new worry among policyholders. It is whether the life insurance product will pay for COVID-19 death claims. However, both insurance companies as well industry body Life Insurance Council have clarified that death claims will be cleared without delay.

Since a few insurers had the word ‘Force Majeure’ in their policy terms and conditions, there was a worry that this clause would be invoked to reject COVID-19 claims.

This clause meant policy is held at abeyance in case of a sudden incident like an epidemic, natural calamity, riots or civil unrest.

The insurance regulator had on March 23 asked life insurance companies to expeditiously settle death claims related to COVID-19.

The Life Insurance Council has further clarified that ‘Force Majeure’ will not apply in case of COVID-19 death claims.

Also Read: Live updates on the Coronavirus outbreak in India

“The life insurance industry is taking every measure to ensure that the disruption caused to policyholders due to the lockdown is minimal, by providing them uninterrupted support digitally, be it for honouring death claims related to COVID-19 or servicing their policy. We reiterate that all life insurance companies stand by their customers in these difficult times and the customer should not be swayed by misinformation or misrepresentation,” said Life Insurance Council in a statement on April 6.

This step was taken to reassure customers who had reached out to individual life insurance companies seeking clarity on this clause in their contract as well as to dispel rumours to the contrary. All life insurance companies have communicated to their customers individually in this regard as well.

Both term insurance plans as well as savings plans cover death claims during the policy term. However, there were some rumours circulating on social media that the ‘Force Majeure’ clause would be invoked to not pay death claims. Now the industry has classified these reports as inaccurate.

Originated as a term in French law in the 1880s, the 'Force Majeure’ clause was used to absolve companies of liabilities from unprecedented events that were beyond the control of the entities.

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