The great uncertainty that the coronavirus pandemic projects not only on society as a whole, but also on the lives of all citizens, could push them to seek protection in the form of insurance. A health or death policy — two of the leading non-life insurances — will not be a guarantee against a potential infection, but, in theory at least, it could lessen the magnitude of its consequences on the household economy. On this consideration, however, the sword of Damocles of the so-called exclusions weighs. “With regard to Covid-19, if the insurer excludes epidemics and pandemics, we cannot expect that they will cover us for it”, Carlos Lluch, technical director of the Lluch y Juelich insurance brokerage. Under what criteria, then, would it compensate 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 medical insurance, only behind car policies (31.5%), according to the latest report from the Ministry of Affairs Economical. And, during the pandemic, these are the only ones that have grown during the pandemic, 4.9%, according to data from the Unespa employers’ association. Private health insurance guarantees health and hospital assistance, depending on the type of contract. “There are those that only cover out-of-hospital 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 insurances that limit their benefits to a certain medical group, 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 it has been incurred ”, he adds.
They are characterized by a series of advantages: “Being able to choose the doctor, drastically reduce waiting lists for both diagnostic tests and surgery, and hospitalization with more intimacy and a better quality of life for the patient and the companion”, Lluch desgrana. Regarding Covid-19, however, “few expectations can be made, since the coverage is not comprehensive. Some insurers are covering the initial assistance, including PCR, referring hospital cases to the public system, such as those that 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 the numbers. Since “the function of insurance is to assume risks from its policyholders and to do so responsibly, in exchange for a sufficient premium”, it will try to calculate how much that effort is worth. Therefore, the proportion of the population already infected by the coronavirus (10%, according to the latest wave of the seroprevalence study, whose results were presented on December 15) and of deaths from Covid (around 0.1%) should be observed. ), and the average stay in hospital for those acutely affected (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 KPMG consultancy. This calculation would be enough, in Lluch’s words, 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 household policies (11.9%). The funeral insurance covers the expenses and services for the funeral and the burial or cremation of a deceased person, as well as the repatriation of the corpse to its place of residence, if the death occurs during a trip, the services of management, will and assistance psychological for the family, among others.
“If we already know that the death of a relative would cause us a significant economic or emotional upheaval, it is useful to hire him”, emphasizes Lluch when asked about the advantages of death insurance. “That someone take care of all the procedures, avoid us the particular fees of the funeral homes and that the pain due to the death of a loved one is not accompanied by a great economic loss, these are as many objectives for those who make sure,” he adds.
But, again, beyond the presence of previous diseases or the exercise of certain professions, the exclusions also include epidemics and pandemics. “The almost 50,000 people who died excessively in 2020 due to Covid-19 represent a year-on-year increase of close to 12%,” Lluch reasons. “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 a lifetime policy
There are more exclusions to consider when purchasing health insurance. That it is not insured for diseases that are suffered prior to the signing of the contract or for the so-called health tourism, it is quite logical. “But some companies don’t cover laser technologies either, and others, diagnosis through positron emission tomography or outpatient chemotherapy. Finding any that covers radiotherapy with positrons or robotic surgery is very rare ”, Lluch highlights.
Likewise, this expert assures that there are “many” companies that retain the right to kick their client out each year, a legal practice, since it is included in article 22 of the Insurance Contract Law. To avoid this, “choosing a 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 points out.
As far as death insurance is concerned, it will be better to ignore the commercials who appeal to the concept of seniority to discourage their clients from switching to other insurance. “The use of 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 a single premium insurance. In this regard, this expert cites the case of a very old woman, to whom a bank sold a policy for 5,400 euros, to ensure a capital of 3,500 euros. Result: “The insurance cost him almost 2,000 euros more than the guaranteed coverage,” he concludes.