The Life Insurance expose

Insurance coverage for Covid#1 and 2- Are Life Insurance companies silencing the media overtly and covertly?

Time, they say is a great leveler. A seemingly infallible force may be rendered powerless and a consistent profit maker may become bankrupt overnight. Such is the unpredictable nature of phenomena.

While the nuclear powered new world has been rendered toothless and the mighty have been brought to their knees by the Corona onslaught, there are some interesting sideshows that have not really been covered by the mainstream or social media. One of them is the Insurance business.

Life insurance is about as old as the oldest profession. One preys on lust and the other mints on trust. Companies like LIC have lorded over the insurance segment until only recently when foreign companies have been allowed to enter the segment. LIC has been a consistent profit maker because of the trust it has generated among the Indian middle class in particular. So the question is, what is the impact of the covid attack on the insurance industry?

Business World reports, “INSURANCE PAYOUTS related to the coronavirus disease 2019 (COVID-19) have reached P3.89 billion as of end-2020, a survey conducted by the Insurance Commission (IC) showed.

Out of the 111 regulated entities, 69 respondents reported to have received COVID-19-related claims — particularly from 22 life insurers, 15 nonlife insurers, 18 mutual benefit associations (MBAs), and 14 health maintenance organizations (HMOs).”

However, coming back to India, I tried to find out through google how much LIC has paid out in covid death benefit claims. I used direct, indirect phrases and words but all I got back was how LIC was making it easier to claim and how it was tying up with online pay portals to facilitate premium payments. There was not a single article or story or news clip- from the company or from news sources- that told the following- How much worth of claims have come to LIC for covid-related deaths? How much (numbers or percentages) of the claims were paid out and how much refused due to ‘fine print’.

Logically, LIC should by now be dealing with an avalanche of claims as many people have died and probably most of the deceased held LIC policies in one way or another. Covid#2 is much worse and should worry insurance companies a lot more. The storm is going to come sooner than later, make no mistake.

I wish to clarify here, that this is not about LIC only. Other insurance companies are in the same boat.  But LIC being the market leader, one expects more clarity and transparency on facts and figures and hitting a dead end wall raises a few important questions.

Logically again, if LIC were to give out details it would be divulging information of how many policy holders’ relatives or nominees have made claims. The next obvious figure would be how many were entertained and how many were denied and why. Follow up to that would be the amount payable or paid out.  If the mismatch is too large, which I strongly suspect it would be, LIC would lose more than just money in a big way.

Let me explain. LIC ads tell us “Zindagi ke saath bhi, zindagi ke baad bhi.” Meaning in simple terms, if I buy an LIC policy for 5 lacs and I die during the tenure of the policy, my family will be paid Rs. 5 lacs. Therefore if, for calculation sake, we say 10 people having 5 lakh LIC policies died by Covid, LIC would need to distribute 5x10 = 50 lakhs simultaneously to these families.  

Now the question is, if figures show that 7 of the 10 got the money, IN TIME, mind you, and 3 did not get because of fine print issues, (say that virus death not covered or something like that) LIC would still be given benefit of doubt by the public. But if the reverse were to be the case, then how many people will buy LIC policies after that hits the headlines?

Go try and get those figures, I failed but if you can manage and put it out for others in social media, they will be grateful and thankful to you –Zindagi ke saath bhi and zindagi ke baad bhi.

 

www.amitabhroy.xyz