Getting a comprehensive health insurance policy is quite expensive and may also not serve the purpose due to a longer waiting period compared to a Corona-specific plan.
The fear of highly infectious Novel Coronavirus Covid-19 has made Indians rush to take a health insurance cover, who earlier were reluctant to take such covers. According to a survey conducted by Max Bupa, as much as 71 per cent of respondents now want to take a health insurance plan.
While getting a comprehensive health insurance policy is quite expensive, a new policy may also not serve the purpose of covering Covid-19-related expenses due to a longer waiting period compared to a Corona-specific plan.
In the wake of the Covid-19 pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has taken many timely measures. Several guidelines have been issued by the insurance regulator with the objective of ensuring a seamless claim resolution process, much to the relief of policyholders of health insurance covers.
One of such measures is the instruction to the insurance companies to issue Corona-specific policies with several standardised guidelines within a specific period.
Following are the answers to some questions related to Corona Kavach and Corona Rakshak policies given by T S Manohar, an insurance professional with over 30 years of experience and Anshritha Rai, a final year law student with a keen interest in insurance law.
How does Corona Kavach differ from Corona Rakshak?
Time and again, the regulator has confirmed that existing health plans take care of the hospitalisation arising out of Covid-19. Yet, consumers were earlier unable to recover all expenses borne in connection with Covid-19 treatment.
To resolve this issue, IRDAI mandated all health and general insurers to offer Corona Kavach – a reimbursement and indemnity based standardised health insurance policy. Simultaneously, insurers have been provided the option of rolling out Corona Rakshak – a single premium benefit-based product.
The IRDAI has also directed that the pricing of the premium for both the short term plans would be on a pan India basis as opposed to zone-wise pricing. While only the hospital bills are reimbursable under Corona Kavach, the entire sum insured is payable under Corona Rakshak.
Corona Kavach is offered both on an individual and family floater basis. On the other hand, Corona Rakshak is available only on an individual basis. These are the noteworthy distinctions between the two short period products.
What are some factors to be taken into account by customers?
Interestingly, typical hallmark features of health plans such as portability, renewability, migration and payment of premium in installments are inapplicable to these products. Remember, the policy effectively expires on the exhaustion of the sum insured and cannot be revived thereafter. In fact, the tenure of the policies range from 3.5 months to 6.5 months to 9.5 months.
The plans cover co-morbidities (pre-existing ailments) and are beneficial to those, who are at higher risk of getting infected. Insurers, however, are entitled to exercise their discretion in underwriting the policy and in determining the pricing. More importantly, the existence of specific adverse health conditions may result in a rejection of the proposal by some insurers.
Opting for a plan with a longer tenure is suitable, keeping in mind the initial waiting period, risk of community spread of the virus, the short tenure and non-renewable nature of the products. Age, number of dependents, health status etc ought to be duly factored in when deciding the sum insured.
Are claims for hospitalisations in temporary and make-shift facilities eligible for an insurance claim?
In its recent guidelines, the insurance regulator has clarified that Covid-19 treatment availed at government recognised temporary hospitals or make-shift hospitals will be covered under health policies. Previously, aggrieved consumers had raised complaints against some insurers for refusing to settle claims for Covid-19 hospitalisations at temporary or make-shift hospitals. The treatment of temporary and make-shift facilities as equivalent to hospitals regardless of the definition of hospital in the policy contract is advantageous and favourable to customers.
A drastic shift in the mindset towards health insurance has been witnessed in recent times. IRDAI has introduced a slew of promising measures amid the Covid-19 surge. Given the current trajectory of the novel pandemic, the customer centric approach adopted by the insurance regulator and insurers is a welcome move. Insurance is a must have in today’s world and the pandemic is a caveat to those who do not have a basic health plan. Bringing the uninsured and underinsured citizens within the insurance net is of overriding priority.
Health covers exclusive to the pandemic are especially beneficial to those who do not have any insurance coverage. However, it must be noted that a personal health insurance cover offers comprehensive protection and is highly imperative. As additional protection, a Covid specific plan is helpful in supplementing regular health policies. The high hospitalisation costs associated with the virus has resulted in an uptake in the purchase of health insurance covers. It is high time to realise that health insurance is a long term investment.