Surge in cases spur demand for COVID-19 insurance in Japan
People wait in line in front of a PCR testing facility in Osaka City on Jan 14. Yomiuri Shimbun file photo
TOKYO — A recent surge in coronavirus infections has led to an increase in demand for COVID-19 insurance, which offers a lump-sum payment to policyholders in the event they contract the virus.
With premiums as inexpensive as a few hundred yen, some policies provide tens of thousands of yen to clients. However, insurance companies have now been forced to suspend the sales of COVID insurance or raise premiums because purchases have exceeded their expectations.
Taiju Life Insurance Co., a subsidiary of Nippon Life Insurance Co., stopped selling a certain type of COVID medical insurance from Friday.
The insurance policy, with a monthly premium of ¥370 for men and ¥340 for women, provides a lump-sum payment of ¥100,000 in the event the policyholder is hospitalized after becoming infected with the coronavirus.
Most companies set premiums and calculate payouts for their medical insurance policies based on the assumption that a certain percentage of their policyholders will become infected.
Article continues after this advertisement“The number of infected people has exceeded our expectations, so we have no idea when we will resume sales,” said a Taiju Life Insurance official.
Article continues after this advertisementSompo Japan Insurance Inc. began selling COVID insurance policies through the payment app PayPay in December. The insurance premium for three months is ¥500, and policyholders are expected to receive ¥50,000 if they test positive.
The number of policies sold by the company exceeded 100,000 as of Jan. 25 and 200,000 as of Tuesday.
A subsidiary of Dai-ichi Life Insurance Co. raised premiums for COVID insurance in February to almost four times what it was in January.
Most insurance companies have a policy in which a person cannot collect any payments for 14 days after signing up for COVID insurance — even if they test positive — to prevent people from purchasing the insurance after they suspect they are infected.
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