Impact of COVID - 19 on Financial Planning in India

India is at a crucial stage in its fight against the COVID-19 pandemic. But the necessary measures to limit the spread of the virus is causing a dramatic decline in economic activity and policymakers are worried about fighting the virus and minimize its impact on the economy. The coronavirus is making the entire world come at a standstill. The priority is to save lives, but on the other hand, it is also required to keep running the economic activity as the people would die due to starvation.

Policymakers must be prepared for long-term challenges, as the effect of the virus will not be short-term. It is, however, difficult to assess the adverse impact of the pandemic on the entire nation. It is essential to determine the immediate financial health to frame various strategies to deal with the situation shortly as the situation is going to endure for a long time. India's growth in the fourth quarter of 2020 went down to 3.1%, which is quite alarming for a nation to cope up with.

POSITIVITY OF THE IMPACT:

As it is said, everything has a positive side; also, the COVID-19 pandemic and lockdown have taught us that we should not keep every single thing for the last moment. It is clear now that we cannot get everything just like that. Notably, India had also been passing through a pre-pandemic slowdown, according to the World Bank. Salary hikes, regular flow of incomes, and easy availability of credit are some of the factors that defined how people earned and spent money during pre-Covid days. Most of the people applied for loans for personal consumption.

Very little aimed at creating new assets. But now the scene is different. Minds of people are changing as it is necessary to build assets for the primary need instead of a luxury. Conservation of cash is a priority now. Now, people are aware to save more for a secured future. Investing in different types of insurances like health and life insurance, will allow you to deal with the situation in a better way.

INSURANCE TO MERGE AS BASIC NEED:

Major companies in India, such as Larsen & Toubro, Bharat Forge, UltraTech Cement, Grasim Industries, Aditya Birla Group, BHEL, and Tata Motors, have temporarily reduced operations. Young startups have been impacted on a larger scale for the economic crisis. IRDA has directed the insurance companies to provide a standard package for COVID insurance mandatorily. Still, it's also important to note that COVID-19 claims are not very high in number because the number of people having health insurances is quite low, which is a matter of concern.

As of now, it has become a necessity for COVID insurance for every person like the other primary needs. The insurance provider needs to provide coverage of up to Rs 2.5 lakh for hospitalization expenses related to COVID-19. Senior citizens till the age of 65 years can take the benefit of the policy. The main objective in concern to explore financial health at an individual level and country-level in India.

A probable norm will be saving in the beginning and spending later rather than the present practice of spending at first and preserving what is left. Conserving cash will become a priority. COVID-19 insurance is also made necessary while traveling to make the customer feel safe and secure. 2020 will always stay in the memories as the most crucial period in history. Seven months passed on, the pandemic is still revolving around most of the world, and as noted, the cases are still rising. This COVID insurance will protect one from the virus and other illnesses and will also ensure financial security.

EFFECTIVENESS OF COVID INSURANCE

Covid-19 is a hot topic today. In this crisis period, it is imperative to have your life covered by insurance. As a result, several insurance companies are coming forward to introduce the new policies of COVID Insurance. In these tough times of coronavirus outbreak, insurance is something you should not ignore. One of the most prominent insurance providers in this respect is Aegon Life. It has taken a remarkable step in association with Flipkart.

The policy gives you the opportunity to cover both Life and Hospital expenses due to Covid-19. Apart from these, several other insurance companies have taken initiatives to launch covid insurance policies. These steps have a profound impact on the people at large. Also, these policies are behaving like an oasis amidst the novel coronavirus pandemic. So, if you are tensed about your future secure the same with these outstanding policies. The effectiveness of the insurance plans is immense.

Indian Government is taking special care and necessary measures in order to control the spreading of this dangerous virus. However, the current position is preaching something else. The increasing number of deaths, along with more positive cases, have placed the common public in a dilemma. But the medical assistance has been provided in the government hospitals to the affected citizens. More and more arrangements and facilities are getting ready to accommodate the new patients. The good news is that there are several reports of recoveries. This is a sign of positivity that has impressed a lot of people.

STEPS OF IRDA

The Insurance Regulatory and Development Authority of India (IRDA) has already issued an advisory for the insurance companies. This advisory is in favor of processing the claims related to Covid Insurance policies. Following the direction of IRDA, almost all of the health insurance companies have included the coverage of coronavirus in their existing policies. This implies that all the current policyholders having 7health insurance policies can now enjoy the protection against Covid-19.

Let us take a look at the norms in relation to the new addition in the world of insurance.

• The policy will cover all the medical expenses that you incur for treating the novel coronavirus.
• The hospitalization charges connected with the treatment of coronavirus will also get the coverage
• Under this policy, the insurance company will reimburse all the medical expenses incurred in the quarantine period

While taking the policy, you should check all these points before signing the policy documents.

SOME NOTABLE LIMITATIONS

Indeed, the coronavirus insurance policies are providing a lot of benefits to the citizens. However, you cannot ignore the notable limitations present in the current policy terms and conditions. Currently, there is no system of renewal for the Coronavirus Health Insurance Policies.

In fact, it is only for one year. Hence, many people may find it quite disadvantageous. Generally, there is an initial period of 15-30 days attached to every health insurance policy. The underlying meaning is that if you already test positive for corona, or claim the amount within this waiting period, the policy will not be available for you.

As the present situation is indeed alarming, more people should think about the availing of this kind of insurance policy. A regular health insurance policy will now include the reimbursement of medical expenses covering most diseases, including Covid-19. The exclusive Coronavirus Health Insurance Policy will also cover both the pre and post hospitalization expenses as well as the ambulance charges. The treatment expenses for determining the symptoms of coronavirus will also form part of the policy.