The COVID-19 pandemic brought about a major shift in the perception of life insurance among consumers and the delivery modes by insurance providers. It changed the way businesses in India, including the insurance sector, operate. Even for the consumers, the pandemic was a wake-up call regarding the importance of life insurance in challenging times.
The COVID-19 pandemic has had a significant impact on the online life insurance industry in India. Here are some of the key ways in which the life industry has been affected:
● Increased demand for life insurance:
The pandemic has highlighted the importance of financial planning and protection for families. As a result, there has been a surge in demand for life insurance policies, particularly term insurance plans, which offer a high amount of coverage at an affordable price. According to IRDAI data, the number of life insurance policies sold and the total amount of premiums collected have registered year-on-year (y-o-y) increase in June 2022, compared to the same month in the previous year.
● Change of Perception for life insurance as a pure risk insurance cover:
This can be attributed to the psychological impact of the COVID-19 pandemic, but people are veering towards pure protection plans like term life insurance rather than insurance-based savings plans like ULIPs. As more and more people look to buy life insurance, the affordability and simplicity of term plans have led to its rising popularity.
● Changes in underwriting practices:
In order to minimize the risk of infection, many online insurance companies have adopted digital underwriting processes. This includes the use of telemedicine, video calls, and online medical examinations, which enable insurers to assess the health of potential policyholders without requiring in-person visits.
● Customers are looking for better customization and targeted products:
After the pandemic, consumers are looking for better life insurance products, along with personalized options. The need for flexibility in payments, innovative products, online modes of transactions (contactless purchase and renewal and added benefits of COVID-19 insurance in existing plans are some of the primary expectations from a post-pandemic insurance sector.
● Rise in digital modes of transactions by customers:
With the increasing focus on social distancing and contactless transactions, more and more consumers are turning to online modes of buying and renewing life insurance. This has prompted insurance companies to offer digitally enabled omnichannel systems and better online functionalities.
● Changes in policy coverage:
Some life insurance policies have been modified to provide coverage for COVID-19 related hospitalization and treatment expenses. In addition, some insurers have introduced new policies specifically designed to provide coverage for pandemics and epidemics.
As a buyer, you need to avoid ‘panic-buying’ and focus on buying the right product. Research, compare and find the best life insurance plan that suits your needs.
Overall, the COVID-19 pandemic has led to significant changes in the life insurance industry in India, including a shift towards digital processes and an increased focus on financial protection for families. It remains to be seen how these changes will shape the industry in the long term.
Neha Panchal - Financial Content Writer
Neha used to be an Engineer by Profession and Writer by passion, which is until she started pursuing full-time writing. She's presently working as a Financial Content Writer, with a keen interest in all things related to the Insurance Sector.