The COVID-19 has had a profound global impact, leading to a critical examination of the role of health insurance and the legal framework governing it. The study begins by analysing the legal framework surrounding health insurance, exploring the existing laws, regulations, and policies that govern its coverage. It investigates how these legal provisions address communicable diseases and whether they adequately account for the unprecedented nature of the COVID-19 pandemic. Furthermore, the study delves in to the response of insurance companies to claims related to COVID-19. It examines whether insurance policies explicitly include or exclude pandemics or epidemic as covered perils. This study aims to understand the legal implications of health insurance during the COVID-19 pandemic, specifically focusing on whether the epidemic was encompassing within the realm of life insurance as a peril, and the position of insurance companies regarding compensation. Additionally, it explores the factors that influenced insurance companies’ decisions on providing compensation to policy holders affected by the COVID-19 pandemic. Understanding the legal aspects of health insurance during the COVID-19 pandemic is crucial for policy makers, insurance regulators, insurers, and policy holders. The findings of this study contribute to the existing knowledge base and can help to guide future improvements in health insurance policies and legal frameworks to better address the challenges posed by global pandemics.