An insurance agent visiting your home/office, getting multiple documents signed and medical tests were the standard operating procedure (SOP) for getting an insurance policy in India. However, a lot has changed now.
From April 2020, after the nationwide lockdown was announced, insurance companies had to quickly devise ways to issue paperless policies without compromising on their underwriting rules.
This led to a slew of changes in the way policies were sold and delivered. Know-Your-Customer (KYC) procedures became completely digitised, COVID-19 related questions gained prominence and medical underwriting happened via video calls.
For COVID-recovered customers, there could be a cooling-off period of 3-6 months, only after which an insurance policy is issued. As reported by Moneycontrol earlier, vaccination certificates could also become a must-have to get a policy and help you get discounts.
COVID-19 questionnaire and test reports
Sachin Dutta, Chief Operating Officer, Canara HSBC OBC Life Life Insurance, said that at the time of onboarding itself, customers are asked 4-5 COVID- related questions.
The questions relate to international travel in the past 2-3 months, duration, purpose and name of destination. Plans and purpose of future travel are also sought.
Dutta said that customers are also asked to disclose if they currently have any flu-like symptoms such as cold, persistent cough, running nose, headache and fever. Those testing positive for COVID-19 have to provide all reports.
Since there were a lot of queries about how to disclose COVID-19 status and whether their claims would be impacted by the virus, insurers are now starting to have standardised forms for disclosure.
Anand Pejawar, President-Operations, IT & International Business, SBI Life Insurance, said that the COVID-specific questionnaire was introduced after the company started getting a lot of queries from on how to disclose their status and how claims would get impacted.
The questions would be around COVID-19, home quarantine and hospitalisation. Details of vaccination and foreign travel also have to be explicitly disclosed.
“SBI Life has also formulated guidelines on how to underwrite cases after recovery, and what should be the waiting period. It has served us well as we have been able to take care of the increased demand for insurance in the wake of the pandemic as well as to allay customer fears about policy validity and claim settlements,” he added.
Since the vaccination drive from February 2021, customers not wanting to take the vaccine may also find it tough to buy insurance. Those vaccinated with both the shots will find it easier to buy term plans, said industry sources.
Lalitha Bhatia, Chief Operating Officer, Ageas Federal Life Insurance, said that, since April 2020, certain COVID-19-related changes had been implemented in the underwriting guidelines, with the COVID questionnaire becoming a mandatory document at the time of policy purchase.
From January 2021, Bhatia added that the guidelines have been slightly relaxed on account of vaccination, which now forms a part of the COVID questionnaire.
On the non-life side, pre-existing diseases are to be disclosed. The waiting period depends on the age and the policy chosen. Hence those who had undergone treatment for COVID-19 also have to disclose details of hospitalisation and home treatment for medical insurance.
Sanjay Datta, Chief, Underwriting, Claims and Reinsurance, ICICI Lombard General Insurance, said that it would be prudent for customers to declare pre-existing diseases.
"We urge customers to declare if they have received treatment for any condition or symptom(s)/ have undergone hospitalisation for any illness/surgery/ or currently taking medication(s) for any condition or medical procedures. Customers are also urged to declare any diagnostic tests they may have undergone in the past as all these details are significant for our medical team to grade the risk,” he added.
Medical tests go digital with lockdown
When it comes to insurance policies, companies would insist on getting a thorough medical check-up to ensure that the pricing of a product is done as per risk norms. Acceptance of an insurance risk is also determined by how healthy an individual is.
Amidst COVID-19 and the resultant lockdown, getting medical tests done was not possible. So that is being replaced by video medical tests.
Pejawar of SBI Life said that, at the company, there are large non-medical limits followed by limits for tele-verifications. Medical tests are not mandatory in a large number of cases, he added.
Telephone-based verification is more common. This is where a medical professional would get on a call with the proposed policyholder and assess his/her health conditions.
Mayank Bathwal, CEO, Aditya Birla Health Insurance, said that pre-policy assessment is made more customer-friendly as they have deployed tele-underwriting. So potential customers need not undergo physical tests for most of the products.
"As a majority of the test centres were closed during lockdown and customers were hesitant to go for medicals, we have waived off medical tests and replaced them with tele-medical underwriting for most of our products. Customers can easily sit in the comfort of their homes and provide us with the required risk- related data," he added.
At ICICI Lombard, Datta said that medical tests are currently determined on the basis of the customer’s age, sum insured opted for and pre-existing illnesses disclosed. It is not mandatory for all new policies.
Some insurers are adopting a wait-and-watch approach. Suresh Agarwal, MD & CEO, Kotak Mahindra General Insurance, said motor business is slowing down while health insurance is growing.
“As far as our underwriting practices are concerned, we are yet to make any changes in our approach like mandatory pre-medicals. The rise in claims cost needs to be looked at from a portfolio level rather than policy level. We are monitoring the situation and will take an appropriate call as it progresses,” he added.
Medical insurance claims worth Rs 9,000 crore have been settled so far by non-life insurers. Life insurers have settled COVID-related death claims worth close to Rs 2,060 crore so far.