The great uncertainty that the coronavirus pandemic projects not only in society as a whole, but also in the lives of all citizens, could push them to seek protection in the form of insurance. A health or death policy – two of the main non-life insurance policies – will not be a guarantee against a potential infection, but, at least in theory, it could lessen the magnitude of its consequences on the household economy. On this consideration, however, weighs the sword of Damocles of the so-called exclusions. “Regarding Covid-19, if the insurer excludes epidemics and pandemics, we cannot be expected to be covered for it,” says Carlos Lluch, technical director of the Lluch y Juelich insurance brokerage. Under what criteria, then, would it pay to take out health or death insurance in times of coronavirus?
In 2019, almost 22% of what Spaniards spent on non-life insurance went to health insurance, only behind car policies (31.5%), according to the latest report from the Ministry of Foreign Affairs Economic. And, during the pandemic, these are the only ones that have grown during the pandemic, 4.9%, according to data from the employer Unespa. Private health insurance guarantees health and hospital care, depending on the type of contract. “There are those that only cover outpatient care, hospitalization, or surgical interventions, or that limit their benefits to a few serious illnesses,” explains Lluch.
“Other, more common products cover any need not expressly excluded. In all cases, we can find insurance that limits its benefits to a certain medical chart, generally very broad, and others that provide coverage with free choice of doctor and hospital anywhere in the world, guaranteeing a certain percentage of reimbursement of the expense in which has been incurred,” he adds.
A series of advantages characterizes them: “Being able to choose the doctor, drastically reducing waiting lists for both diagnostic tests and surgery, and hospitalization with more privacy and better quality of life for the patient and the companion”, explains Lluch. Regarding Covid-19, however, “few expectations can be made, since the coverage is not comprehensive. Some insurers are covering initial care, including PCR, referring hospital cases to the public system, such as those who have to be in an ICU, but there are also other attitudes towards the same problem”, admits this expert.
Lluch, however, believes that the solution to this problem lies in numbers. Since “the function of insurance is to assume risks for its policyholders and do so responsibly, in exchange for a sufficient premium”, it will be a matter of calculating how much that effort is worth. For this reason, the proportion of the population already infected by the coronavirus (10%, according to the last wave of the seroprevalence study, the results of which were presented on December 15) and those who died from Covid (around 0.1%) should be observed. ), and the average stay in hospital of those affected acutely (8.46 days) and critical cases (18.47 days), with an average cost of 875.59 euros per day and 2,486.22 euros per day, respectively, according to the consulting firm KPMG. This calculation would be enough, in the words of Lluch, for the insurer to “provide a solution to its clients as an alternative to an easy, but not very empathic, contractual exclusion.”
Prevent economic losses
The same occurs with death insurance, which accounted for 6.6% of non-life premiums collected in 2019, ranking fourth, preceded by multi-risk home policies (11.9%). Funeral insurance covers the expenses and services for the funeral and burial or cremation of a deceased person, as well as the repatriation of the body to its place of residence, if the death occurs during a trip, agency services, will and assistance psychological for the family, among others.
“If we already know that the death of a family member would cause us a significant financial or emotional upheaval, it is useful to contract it,” Lluch underlines when asked about the advantages of death insurance. “That someone takes care of all the paperwork, avoids us the particular rates of funeral homes and that the pain due to the death of a loved one is not accompanied by a great economic loss, are many other objectives of those who are insured,” he adds. .
But, again, beyond the presence of previous illnesses or the exercise of certain professions, epidemics and pandemics are also considered among the exclusions. “The almost 50,000 people who died in excess in 2020 due to Covid-19 represent a year-on-year increase of close to 12%,” reasons Lluch. “If we establish a margin and round to 20%, we should be able to ask an insured if they prefer to pay 45 euros a year without Covid coverage or pay 54 euros and have it included,” he calculates.
better life insurance
There are more exclusions to consider when taking out health insurance. That it is not insured for diseases that are suffered prior to the signing of the contract or for the so-called medical tourism, is quite logical. “But some companies don’t cover laser technologies either, and others cover diagnosis through positron emission tomography or outpatient chemotherapy. Finding one that covers positron radiotherapy or robotic surgery is very rare”, highlights Lluch.
Likewise, this expert assures that there are “many” companies that retain the right to fire their client every year, a legal practice, since it is included in article 22 of the Insurance Contract Law. To avoid this, “choosing a whole life policy will be a smart solution,” he says. The insurers that offer this possibility “have more stable and quality medical charts than the low-cost they don’t have,” he says.
As far as funeral insurance is concerned, it would be better to ignore the commercials that appeal to the concept of seniority to dissuade their clients from switching to another insurance. “Using recent mortality tables will always be more beneficial than if we have a very old policy, since before, people died younger,” explains Lluch. In the same way, it will not be convenient to take out single-premium insurance. In this regard, this expert cites the case of a very elderly woman, to whom a bank sold a policy for 5,400 euros, to insure a capital of 3,500 euros. Result: “The insurance cost him almost 2,000 euros more than the guaranteed coverage,” he concludes.