Insurance post COVID-19: Lessons learnt and decisions to make for your personal safety
It’s been almost three months since one of the biggest economies in the world have undergone a complete lockdown due to the deadly Coronavirus. While most developing and developed countries, India included, are setting a brilliant example of containing the spread of the pandemic – one thing that the unceremonious arrival of this guest has taught people is the growing need of having an insurance policy as a fixed part of their financial planning.
In today’s society, Coronavirus may be the latest nail in the coffin. However, it is not the only thing eroding human health and livelihood. From monsoon floods in India to earthquakes, bush-fires and volcanic eruptions, since the last one year the world has witnessed a continuous flow of natural calamities on a month on month basis. Thus, in this kind of a scenario insurance is no longer a luxury that can be overlooked. Insurance, especially health insurance, has become a necessity and must hold its ground even in a conservative and minimalistic savings and investment plan.
Below are some important insurance-focused investment decisions that one should take henceforth while designing one’s savings portfolio:
1. Type of insurance
Insurance policies are of multiple kinds. Some financial service providers have devised insurance policies for the most rudimentary problems an individual may face. However, in a post-covid world insurance policies that protect you against natural calamities and serious/ infectious diseases should be a priority. Considering the way the world is falling apart, an insurance policy that covers a floating cover for multiple diseases should be a staple for every individual. Post the covid outbreak, some insurance providers have also introduced policies especially for diseases in the nature of these pandemics.
2. Health cover
Insurance health cover should be determined based on an individual’s existing lifestyle, existing liabilities, and number of dependents, stress levels and health conditions. A prospective buyer should be very mindful in determining his insurance cover so as to not get himself under insured and in a soup during a crisis.
3. Re- assess risk
When it comes to the need to invest in an insurance policy, individuals often showcase a very optimistic attitude. However, the recent string of events have made it evident that in this new world order nobody is safe irrespective of their current health, wealth or financial wellbeing. Thus, individuals should re-assess their risk exposure by examining factors like liabilities, illnesses and most importantly geographical location and climate change.
4. Treatments covered/ extent of coverage
Similar to the nature of the current environment, diseases, illnesses and other situations are also unpredictable. Thus, a health insurance should cover hospital as well as in-patient treatments. A policy that covers pre and post hospitalization along with post – retirement aspects is the most suitable when you are uncertain about the circumstances in which the policy may need to be activated. Other insurance policies similarly, should cover multiple kinds of scenarios to ensure damages arising from any kind of mishaps are covered.
5. Turnaround time for claims
One of the most important conditions to evaluate a policy. Turnaround time is the time that companies take to process your claims. In a rapidly-destructive world like the one we are going to be entering in a few months from now, we may need a mechanism where insurance claims are settled as early as possible to be able to allow cash flow liquidity in the hands of individuals. Thus, a policy, which though offering a lesser premium, is taking dog’s ears to process a claim is certainly out of the question in a rapidly evolving global environment.
Nobody, not even our forefathers, predicted the world in 2020 to be in the center of a situation where the entire world was brought to a standstill at the same time. This global pandemic has urged people to rethink all their major life decisions and re-instilled in citizens the need to have an active insurance policy. Covid-19 saw no age, health history, bad habits or wealth while claiming its prey. Thus, the most basic lesson this pandemic has left us with is the fact that no matter what circumstances we are laced with, an insurance policy to protect us from unforeseen losses and financial distress is a must in the current unpredictable and whimsical world.