health insurance policy: How the coronavirus pandemic will determine your health and life insurance choices

During the pandemic, the high medical costs and untimely deaths made Ankur reconsider his insurance requirements. He witnessed how friends and relatives found themselves completely unprepared for the suddenness with which they lost someone near, and the financial implications of losing an earning member. Many of them were saddled with huge medical bills and problems with insurance claims. Though Ankur’s existing life and health insurance policies are enough to meet his tax-saving needs, he wants to buy more insurance for himself and his faily. Does he need to upgrade his health policy to a sum assured of Rs 7.5 lakh and existing life cover of Rs 50 lakh? He wants to know how he can evaluate the changes to his insurance needs in the midst of the pandemic and what his options are.


It is important for Ankur to understand that his insurance decisions should not be purely driven by tax-saving concerns. While it may be a benefit that is definitely useful, it should not be the deciding factor when it comes to the sum assured or coverage for a family like Ankur’s which is dependant on him for their various financial goals. Motivated by the fear of contracting covid amidst multiple potential waves, investing in a comprehensive health plan for his family of three (including his wife and son) makes perfect sense. In fact, Ankur could also choose covid-specific policies offered by all insurers. He could consider making a porting request as he is looking for policies with higher sum insured and better features like zero co-payment, no room-rent capping and shorter waiting periods.

Ankur had purchased his first insurance policy four years ago as a means to protect his family’s financial future. However, he must evaluate his current cover not merely as a tax-saving instrument, but whether it will be enough to replace his income in case of his unfortunate demise. Ideally, the sum assured of Ankur’s term plan should be 15–20 times of his annual income, and the policy tenure should be until his retirement age (61–81 years).

A well-insured household is always better equipped to deal with economic uncertainties. Protection products are becoming the foundation of financial planning especially considering the impact of a deadly pandemic. During unprecedented times like these, it is important for nuclear households like Ankur’s to make the right and timely decisions about protection specific to one’s needs.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)