As if death by Covid wasn’t tragedy enough, the misery of many families is being compounded by insurers denying compensation, threatening to send them into a debt spiral.
Insurers are contractually obligated to settle only those diseases included in the scope of coverage and Covid-19 is absent from most such lists. Survivors of those with fixed-benefit health policies covering critical illness typically bought before 2020 have been jolted by the development.
To make matters worse, many of these policies were sold by bank agents as bundled riders to mortgage loans — in the event of death due to disease or accident the debt is waived. However, denial by insurers mean families get caught in a debt trap.
Private insurer HDFC Ergo said this in a letter to the family of a mortgage insurance policyholder who died of Covid-19 during the second wave of the pandemic: “As the said ailment (Covid-19 sepsis) is not covered under critical illness enlisted under the terms of the policy, hence this claim is being repudiated in the light of the above.”
HDFC Ergo lists nine diseases as being liable for claims under critical illness — cancer, renal failure, major organ transplant, sclerosis, stroke, heart valve replacement and paralysis, among others.
“A critical illness policy linked with home loans only covers the critical illnesses listed in the policy. Hence, it does not trigger or pay for claims beyond the purview of the policy,” an HDFC Ergo spokesperson said in response to ET’s queries. Most health insurers in India have a list of 8-20 medical conditions listed as critical illness for their fixed-benefit policies, experts said. Insurers in India have been making claims processes stringent amid mounting loss ratios following second wave.
In the first four months of FY22 up to end-July, a total 1.23 million Covid claims worth ₹13,804 crore were filed with general and health insurers, according to data compiled by the General Insurance Council and accessed by ET.
Of this, 940,000 claims worth ₹9,178 crore have been settled. In FY21, insurers got 980,00 Covid claims worth ₹14,560 crore, of which they settled 840,000 claims worth ₹7,833 crore.
The data showed that 330,000 claims worth ₹10,603 crore are still outstanding. Insurers are yet to take a call on whether to process settlements based on their investigations. In FY22, 49,452 Covid-19 claims worth ₹389 crore have been rejected on various grounds. “India is one of the only countries where private insurers are paying the full amount for coronavirus claims. In most countries, this bill is being footed by the sovereign,” said Krishnan Ramachandran, the chief executive of Niva Bupa HI, formerly Max Bupa Health Insurance.
“Insurance industry has done a commendable job… The data on Covid claims requires a deeper analysis as the settled amount is also a function of policy designs which specify co-pay limits, room rents and other aspects.”
Insurers are contractually obligated to settle only those diseases included in the scope of coverage and Covid-19 is absent from most such lists. Survivors of those with fixed-benefit health policies covering critical illness typically bought before 2020 have been jolted by the development.
To make matters worse, many of these policies were sold by bank agents as bundled riders to mortgage loans — in the event of death due to disease or accident the debt is waived. However, denial by insurers mean families get caught in a debt trap.
Private insurer HDFC Ergo said this in a letter to the family of a mortgage insurance policyholder who died of Covid-19 during the second wave of the pandemic: “As the said ailment (Covid-19 sepsis) is not covered under critical illness enlisted under the terms of the policy, hence this claim is being repudiated in the light of the above.”
HDFC Ergo lists nine diseases as being liable for claims under critical illness — cancer, renal failure, major organ transplant, sclerosis, stroke, heart valve replacement and paralysis, among others.
“A critical illness policy linked with home loans only covers the critical illnesses listed in the policy. Hence, it does not trigger or pay for claims beyond the purview of the policy,” an HDFC Ergo spokesperson said in response to ET’s queries. Most health insurers in India have a list of 8-20 medical conditions listed as critical illness for their fixed-benefit policies, experts said. Insurers in India have been making claims processes stringent amid mounting loss ratios following second wave.
In the first four months of FY22 up to end-July, a total 1.23 million Covid claims worth ₹13,804 crore were filed with general and health insurers, according to data compiled by the General Insurance Council and accessed by ET.
Of this, 940,000 claims worth ₹9,178 crore have been settled. In FY21, insurers got 980,00 Covid claims worth ₹14,560 crore, of which they settled 840,000 claims worth ₹7,833 crore.
The data showed that 330,000 claims worth ₹10,603 crore are still outstanding. Insurers are yet to take a call on whether to process settlements based on their investigations. In FY22, 49,452 Covid-19 claims worth ₹389 crore have been rejected on various grounds. “India is one of the only countries where private insurers are paying the full amount for coronavirus claims. In most countries, this bill is being footed by the sovereign,” said Krishnan Ramachandran, the chief executive of Niva Bupa HI, formerly Max Bupa Health Insurance.
“Insurance industry has done a commendable job… The data on Covid claims requires a deeper analysis as the settled amount is also a function of policy designs which specify co-pay limits, room rents and other aspects.”
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