The Coronavirus pandemic has caused considerable financial damage besides the physiological damage suffered due to contracting the virus. Economic activities have slowed down and caused a loss of income for many. Moreover, in case of hospitalisation or death due to the virus, many households are facing a considerable financial strain. Amidst such a situation, you, as an informed financial advisor, can help your clients make provisions for the possible financial threat of the virus. Let’s find out how –
Insurance and the COVID pandemic
Insurance is one of the most important financial tools for your clients through which they can protect against the financial impact of the pandemic. If your clients invest in suitable insurance policies, they can meet the financial challenges associated with the disease and come out the other side financially unaffected. Here are some essential coverages which you should advise your clients to opt for –
- Health Insurance
The first and the foremost insurance plan, which is a must, is a health insurance policy. In case your clients test positive for the virus, they would be hospitalised. The costs incurred on such hospitalisation can be considerable if they seek medical assistance in a private hospital. In fact, the costs of simple hospitalisation following the infection can range anywhere from INR 15,000 to INR 50,000 on a per day basis. Now calculate this cost for a period of 10 to 14 day stay which is required for complete treatment and the amount becomes considerable. Health insurance plans cover the hospitalisation costs associated with COVID infections thereby providing the much-needed financial relief to your clients if they or their family members do test positive.
Besides normal health insurance policies which cover the hospitalisation costs, insurance companies have also launched COVID-specific health insurance plans. These plans are fixed benefit health plans which pay the sum insured in lump sum if your client tests positive for the illness. The premiums are very low and the lump sum benefit paid can be used by individuals to meet the additional financial costs incurred when they suffer from this dreaded virus.
So, educate your clients about the need of health insurance policies so that they can buy suitable coverage for their medical expenses. If your clients already have an existing health plan, ascertain the sufficiency of the sum insured. If the sum insured is low, ask your clients to step up their coverage to meet the high medical expenses associated with illnesses and injuries, COVID included. You can also sell COVID-specific health plans which would give your clients additional financial support in the face of the pandemic at very affordable premium rates.
- Life Insurance
Once your clients’ health insurance needs are taken care of, you should ask them to consider life insurance policies. Among life insurance plans, term life insurance policies are a must which provide financial assistance if the insured dies prematurely. Since Coronavirus might also cause death in severe cases, your clients need to create a financial provision for their family in their absence. This is where a term insurance plan would prove useful. Urge your clients to opt for a high sum assured so that their families would have sufficient funds at their disposal to meet their varied financial needs.
A protection portfolio, built with considerable planning, can prove to be a financial gift for your clients if they face any type of financial strain due to this pandemic. The pandemic situation is getting worse unchecked and the risk of infection is increasing on a day-to-day basis. While your clients can practice all possible precautionary measures and try and protect themselves from the disease, it can strike unannounced and cause considerable financial damage. So, while safety measures in terms of hygiene are a must, financial safety should also be considered if the emergency does strike. This financial safety can be ensured through insurance and your clients should, therefore, invest in health and life insurance plans for a safety net in this situation.