Haven’t Been Vaccinated for COVID-19? You May Not Get Term Insurance!

Term Life Insurance protects your family financially post your unfortunate death. But do you know that some insurance companies have made it mandatory for people to get vaccinated for COVID-19 before buying term insurance? Max Life and Tata AIA are examples of this new mandate. So, if you are going to purchase term life insurance, read this post further to know more about the COVID-19 Vaccine mandate implemented by insurance companies for prospective customers.

List of Life Insurance Companies Following the New Norm

The following are the insurance companies that follow this new norm to their term insurance plan:

Max Life Insurance: Before issuing term life insurance covers to individuals aged above 45 years, MAX Life requires customers to submit the final COVID-19 vaccine certificate to it. The company has not mandated vaccination certificates to issue term insurance policies, it is just an urge to get insured members vaccinated to ensure their safety. COVID-19 Vaccines are necessary for those who are buying new term life policies.

Tata AIA Life Insurance: If you have received at least one dose, you are eligible to buy a term insurance policy from the insurance company. And the insurer applies the COVID-19 Vaccine norm to all age groups.

Why COVID-19 Vaccine Important in Term Life Insurance?

1. COVID-19 vaccination ensures the highest degree of financial protection to the insured person.
2. Companies like ICICI Prudential, TATA AIA Life and Aegon Life Insurance provide a 7-15 day cooling-off period following the vaccination. It has been observed that after being vaccinated some individuals display hypersensitivity or other reactions, so to take care of that, insurers provide a cooling-off period.
3. Tightens risk management in case of a possible third wave of COVID-19. This logic is similar to the smoker and non-smoker clause, as the non-smoker gets an advantage of lower premiums. Insurance companies could operate under the same assumption, so the insured members get vaccinated to get term life insurance. A non-vaccinated policyholder is deemed riskier compared to a vaccinated policyholder, thereby saving the insurer from an increased claim burden. So, same as the smoker or nonsmoker clause, this helps the insurance companies differentiate policyholders by nature.
4. The trigger for COVID-19 Vaccine condition for issuing new term policies seems to have originated from reinsurers such as Munich Re and Swiss Re.

Note – This article is based on initial developments regarding COVID-19 vaccination for prospective term insurance customers. Sectoral watchdog i.e. the Insurance Regulatory Development Authority of India (IRDAI) is yet to issue its guidelines regarding the same. As and when things clear out more, we will update you the same.