LIC’s Death Claims Rose 21% In First Nine Months Of FY21
The number of death claims settled by India’s largest life insurer surged to a record in nine months through December 2020 when the first wave of the pandemic gripped the nation.
Life Insurance Corp.’s claims crossed 8 lakh in April-December, rising 21% over a year earlier, according to data filed with the insurance regulator. That's the highest ever tally, with the spike in 2020 snapping the trend of decline prior to the pandemic.
By value, LIC paid Rs 16,946 crore on account of the death of policyholders during the nine months. That’s a 35.54% jump over a year earlier. Nearly half of these claims were settled in October-December.
LIC paid Rs 17,420 crore in the entire FY20. The insurer hasn’t released data for full FY21 yet.
BloombergQuint awaits LIC’s response to emailed queries.
LIC hasn’t disclosed the reason for the spike. But none of the claims, according to its disclosure, was older than six months, indicating that the spike coincided with the Covid-19 spread. And it came before the much worse second surge of the virus that has pushed the nation’s healthcare infrastructure to the brink of collapse.
While the world’s second-most populous nation has a low Covid-19 mortality rate based on confirmed deaths, it ranks fourth on casualties linked to the virus at 1.71 lakh, after the U.S., Brazil, and Mexico. Also, focus to contain the virus means those suffering from other critical illnesses can’t easily access healthcare services.
LIC settled more than 3.6 lakh claims in October-December, the highest for the first nine months of the fiscal.
The claims also highlight the impact of the pandemic on the life insurance sector even as the virus increased awareness about life covers, prompting more people to buy covers.