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All You Need to Know About IRDAI's COVID-19 Health Insurance Plans

Editor, TRANSFIN.
Jul 9, 2020 7:00 AM 3 min read
Editorial

Here’s an important deadline you may be unaware of: The Insurance Regulatory and Development Authority (IRDAI) has asked all life, general and health insurance companies to offer two standardised health policies for COVID-19 on or before July 10th.

Yes. On June 26th, the regulator announced two coronavirus-specific insurance products called “Corona Rakshak” and “Corona Kavach”.

The Corona Rakshak policy is a standard Benefit-Based Health Plan. Corona Kavach, meanwhile, will be offered on an indemnity basis. 

Benefit-Based vs. Indemnity-Based Health Insurance Plans

A Benefit-Based Health Plan is one where a fixed amount of funds (i.e. The sum insured) is paid out to cover expenses (including hospital services, post-hospitalisation expenses, medicines etc.) for a predetermined illness or condition that has been insured. 

On the other hand, an Indemnity-Based Health Plan reimburses the policyholder with the actual amount incurred as expenses during a hospitalisation stay up to the sum insured under the policy. More on the differences between these two types of insurance plans here.

 

COVID Health Insurance in India

Presently, many insurers in India are providing COVID-specific coverage but the benefits are not uniform and may not even be sufficient to cover most expenses. 

In light of this, IRDAI’s decision to standardise COVID plans throughout the country is a welcome move, especially given how these plans have wide-ranging benefits (which we’ll get to in a bit). 

This is particularly important considering the state of the healthcare system in India. More than 80% of Indians have no health coverage and the lion’s share of personal health expenditure is still out-of-pocket. Ensuring wider insurance coverage is critical at this juncture as the number of COVID-19 cases in India surges.

Now, back to Corona Rakshak and Corona Kavach...

Insurers are yet to announce their premium rates for these policies, but market participants say premiums could be approximately ₹750 ($10) for a ₹50,000 ($673) sum insured and over ₹4,500 ($60.5) for a ₹5L ($6,729) sum insured.

Before we delve into the individual features of each of these plans, a few general points to note:

  • These are short-term health policies. As such, they are required to have tenures not shorter than three months and not longer than 12. Both Corona Rakshak and Corona Kavach have tenures of 3.5 months, 6.5 months and 9.5 months.
  • The premium under these products will be uniform pan-India. So, no geographic location or zone based pricing is allowed.
  • The entry age is 18 while 65 is the maximum age covered.
  • To avoid any confusion, IRDAI has mandated that all policies have the same nomenclature. Your health insurer’s respective COVID plan would be named thus: “Corona Rakshak Policy, ” or “Corona Kavach Policy, ”.

 

Corona Rakshak

(Link to Official Guidelines)

  • The Sum Insured can be between ₹50,000 ($673) to ₹2.5L ($3,364).
  • This is a single-premium plan where the insured amount will be paid out as lump sum should the policyholder test positive for COVID-19 and be hospitalised for at least 72 hours.
  • The positive diagnosis shall be from a Government-authorised diagnostic centre.
  • On payment of 100% of sum insured, the policy shall be terminated.
  • The policy can be availed on an individual-basis only.

 

Corona Kavach

(Link to Official Guidelines)

  • The Sum Insured can be between ₹50,000 ($673) to ₹5L ($6,729).
  • Hospitalisation expenses covered include room, boarding and nursing expenses; consulting fees; anesthesia, operation theatre charges, ventilator charges, PPE kits and related expenses; ICU expenses; and road ambulance expenses up to ₹2,000 per hospitalisation.
  • Besides hospitalisation expenses, Corona Kavach also covers home care treatment expenses of up to 14 days, if done on a doctor’s advice. Cost of pulse oximeters, oxygen cylinders and nebulisers will also be covered.
  • Expenses incurred 15 days pre-hospitalisation and 30 days from the date of discharge are also covered.
  • Additionally, despite it being a COVID-specific policy, Corona Kavach will also cover the cost of treatment of any comorbid or pre-existing conditions.
  • Family floater option is available for this scheme. “Family” includes legally wedded spouse, parents and parents-in-law, and dependent children up to 25 years of age.

FIN.

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