Apparently, there was a decision made by governing bodies for insurance/Takaful that no coverage for COVID19, neither GL nor via pay & claim.

I too am disheartened by this but I'm aware of the reasoning.

I'll try to explain.

Insurance/Takaful is based on pool of funds. Funds belonging to company or being taken care by company differentiates ins to Takaful.

When client claims, either via GL or P&L, it's taken from these funds.

How the funds are maintained to not deplete?

For investment linked plans, these funds are invested either in equity, bonds, unit trusts etc.

Main reason is to cover the fund fee and to add back the "holes" due to claims.

Surplus is divided back to clients.

Ni yang ramai ejen jual as simpanan (not right)

So why is pandemic not covered?

Pandemic is under general exclusion. Same as act of war/terrorism etc.

This is mainly due to the risk of usage rate FASTER than ability to cover the "holes"

Ie, keluar lagi cepat dari masuk.

With this being a global pandemic, even investing outside wouldn't bring in much difference.

Look at any investment. Most have taken a huge hit.

So how does this affect claims?

The main idea of insurance/Takaful is EVERYONE that subscribes/contributes have SAME equal opportunity to claim.

But if a pandemic is covered, and due to previous, the funds become absolute finite.

It will become first claim, first served.

To those who might get infected later, there'd be no more funds to claim from.

Worse, those who don't even get infected, but wants to claim for other reasons (like accident hospitalisation, or critical illness), will also have no funds to claim from.

This is also why insurance/Takaful won't cover during war or for act of war.

Side trivia: MH17 was supposedly NOT covered. But insurance companies overrode that general exclusion and still paid out.

For this pandemic, some insurance do give out some sort of compensation. Either due to hospitalisation or death.

It is a bit of a cushion, but personally, I would've wanted the coverage.

Though I really understand the reasoning why it's not.

I know it's frustrating to know pandemic is not covered. Especially since apparently any cases tested at private, will be treated at private.

There's a provision to this and a precedent.

If govt instructs private hospitals to take in COVID19 cases, govt should cover the cost. Private hospitals on the other hand, charge the govt at the same cost that GH would've paid for. Not the usual private rate to patients.

There are countries already doing this.

I'm just trying to explain the reasoning.

Let me be clear.

Even as agent, I'm not happy with the decision made. But I understand and I try to make others understand too.

I've always been upfront to clients, to everyone.

And that's what I'm doing now.

But from what I've heard, some companies are pushing to find a solution with governing bodies.

How to still provide assistance but not at the expense of future coverage

Addendum:

When the funds are near depletion, what companies may do is to increase contribution/premium immediately. And it could be a significant increase.

So in short, either not cover pandemic so it's fair to all or cover now but in future everyone gets premium increased.