With the rise in COVID-19 cases in India and looming concerns around the second wave, life insurance companies are looking to make vaccination a must for buying an insurance policy.
This is particularly relevant for term insurance policy which pays claims if the policyholder dies during the premium paying tenure.
Sources told Moneycontrol that this is in view of the new government announcement that said that vaccination will be opened up for everyone above the age of 45 years from April 1, 2021.
It is likely that large private insurers will take the lead in implementing this process. This means that those aged 45 years and above would mandatorily need to get vaccinated if they want to buy a term plan.
"We will start the process in due course. Since vaccines are highly effective and reduce the mortality risk, it is imperative that eligible customers get the vaccine shot as soon as possible. The belief is that a 'carrot-and-stick' approach will work better," said the actuarial head at a bank-led insurer.
Moneycontrol had reported earlier that insurers are in the process of ascertaining whether favourable treatment can be given to customers who are vaccinated against COVID-19.
The sops being planned include waiver of waiting period, premium discounts as well as waiver of medical tests in some cases.
Life and health insurers have been exercising extreme caution while issuing policies to individuals who have recovered from COVID-19, the probable long-term effects of Covid-19 being the key reason.
Rising COVID-19 claims have been a cause of concern for the insurance industry. Life insurers have paid close to Rs 1,900 crore for COVID-19 death claims.
"We cannot take on the higher risks of COVID-19 on our books. All we are asking is that prospective customers get vaccinated considering that there are talks of a second wave. Else, it is a risk we will be taking," said the claims head at a mid-sized life insurer.
He added that those above 45 years getting vaccinated would also get attractive premiums at the time of entry. Higher the age, higher is the mortality risk. Hence, insurance premiums are higher as one gets older.As of March 25, the cumulative number of COVID19 vaccine doses administered in India crossed 5.46 crore according to health ministry data.