The corona virus crisis in Israel: what impact on insurance?

The current coronavirus crisis is causing concern among policyholders in Israel, especially those with health and/or life insurance policies.

The recurring question from the latter is whether their insurance contracts cover them in the event of coronavirus-related illness.

So we're going to try and shed some light on the subject.

First of all, let's distinguish between 2 different types of insurance:

Death Insurance in Israel - Bitouah Haim

1/ For most life insurance policies (bitua'h 'haim in Hebrew), the only clause not covered by this type of contract is the insured's suicide during the first 12 months after taking out the policy.

We can deduce that any other cause of death, including death from coronavirus, would be well covered by the insurance company.

Israel Health Insurance - Bitouah Brioute

2/ Concerning health insurance contracts (bitua'h briut), it should first be pointed out that the cover provided by this type of insurance is well-defined and can be summed up succinctly as the possibility of benefiting from access to an operation or medical treatment in the private healthcare system, as well as to treatments and medicines not included in the public healthcare basket.

Coming back to Covid 19, which is currently rampant, patients are currently cared for exclusively in the public healthcare system, via public hospitals and/or Magen David Adom.

It should also be remembered that there is currently no definitive treatment to combat this virus, and that the day a vaccine and/or treatment is proven and recognized as such by the health authorities, it will surely be fully covered by the public health system, given the scale of the epidemic within the population.

However, if the virus leads to complications requiring surgery, the holder of a private insurance policy will be able to demand that the insurance company cover the full cost in the private healthcare system.

Recently, the Migdal insurance company issued an updated health questionnaire with questions on the coronavirus for customers wishing to take out health insurance. However, to date, no official request has been issued by the company to the Autorité des Marchés Financiers (AMF), which also regulates players in the Israeli Ministry of Finance insurance sector. It should be noted that it is unlikely that this application will be accepted by the AMF, even if it is formulated, as it presents significant ethical problems.

Nevertheless, anyone wishing to take out a health or death insurance policy (even as part of a mortgage (mashkenta) and who has been contaminated by Covid-19 will have to declare it as part of the questions concerning the declaration of a recent hospitalization, or of a viral infection, or even as part of a chronic illness that may develop as a result of the contamination. Following this declaration, the insurance company could refuse to cover any future health problems triggered by the coronavirus.

This observation has prompted certain players in the insurance world to wrongly provoke a certain panic among the general public, in order to aggressively market the immediate subscription of insurance contracts of all kinds, without the potential customer being able to judge the merits and, above all, the real need for the product on offer.