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Only indemnity-based health insurance plans to cover corona claims

Under indemnity health insurance plans, insurers cover the cost of medical expenses during hospitalisation, while in defined benefit, health plans a lump-sum is paid irrespective of the actual hospital expense.

Only indemnity-based health insurance plans to cover corona claims
The instant life insurance cover will be available as a Group insurance cover and will be issued without any medical tests or paperwork.

A day after the World Health Organization (WHO) declared the novel coronavirus as a pandemic, general insurance players on Thursday said the claims arising out of defined benefit health insurance plans will not be applicable as this disease is not included in such policies. However, claims arising out of indemnity-based health insurance plans will be honoured by the insurance companies.

Under indemnity health insurance plans, insurers cover the cost of medical expenses during hospitalisation, while in defined benefit, health plans a lump-sum is paid irrespective of the actual hospital expense.

Gurdeep Singh Batra, head-retail underwriting at Bajaj Allianz General Insurance, said: “As far as Bajaj Allianz General Insurance is concerned, we do not have any restrictions on any endemic or pandemic which has been declared in our indemnity health products. Different insurance players have different clauses and under our indemnity health plans, endemic or pandemic is not an exclusion and we cover the novel coronavirus claims in our policies.”

Market participants also said the novel coronavirus will not be excluded in most of the indemnity health insurance plans. “If a policyholder has a fixed benefit plan and he comes with a claim for the novel coronavirus, there are chances that it may get rejected,” a marketing officer of a general insurance company said. Typically, fixed benefit plans cover critical illnesses such as cancer, stroke paralysis, and kidney failure, among others.

General insurance players also said the advisory issued by the Insurance Regulatory and Development Authority of India (Irdai) will push insurers to settle the claims quickly. “Last week, the insurance regulator had stated that both the treatment during the quarantine period and hospitalisation claims if it results in serious illness, has to be honoured by insurers,” another head underwriter of a leading private insurance company said.

Irdai last week had issued guidelines on handling of claims reported under the novel coronavirus. It had stated that where hospitalisation is covered in a product, insurers shall ensure that the cases related to novel coronavirus shall be expeditiously handled. “All the claims reported under novel coronavirus shall be thoroughly reviewed by the claims review committee before repudiating the claims,” Irdai said in its circular.

Mayank Bathwal, CEO at Aditya Birla Health Insurance, said, “In the past few years, the world has faced outbreaks of dreaded viruses such as Ebola, Zika, Nipah, and now the novel coronavirus. A health insurance policy covers all infections, and the novel coronavirus is one such infection. The coverage will be available in all indemnity products that offer hospitalisation covers. Hence, all covers such as in-patient treatment, pre-hospitalisation, post-hospitalisation and ambulance cover that your health policy offers will be available to you to fight against this pandemic.”

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