Covid insurance makes sense if you have a comprehensive policy
Especially if sum insured is small, at say ~5-7 lakh for the family
The Insurance Regulatory and Development Authority of India (Irdai) has asked insurers to extend the validity of Covid-specific policies – Corona Kavach and Corona Rakshak - till March next. The current validity expires on September 30.
Sanjay Datta, chief-underwriting, reinsurance, claims & actuarial at ICICI Lombard General Insurance, says, "Irdai earlier last year introduced these Covid-specific products which are simple to understand and affordable to encourage maximum health insurance penetration. Keeping in mind the uptake of these policies and the possibility of a third wave of the pandemic, Irdai has extended the timeline."
For individuals and families, it makes sense to have Covid-specific insurance, even if they have a comprehensive plan.
Naval Goel, founder and chief executive officer, Policyx.com, says, "Such insurance plans exclusively manage the expense of the treatment of Covid, putting no pressure on the existing comprehensive health insurance plan."
Corona Kavach
This is an indemnity plan that pays for hospitalisation charges.
Amit Chhabra, head-health insurance, Policybazaar, says, "An important benefit here is that the plan pays for the cost of personal protective equipment and other hygiene-related consumables like gloves and masks, which form a major chunk of hospital bills."
Also, there are no sub-limits on room rent, since capping of room rent usually results in increased out-of-pocket expenditure for the policyholder. The policy tenure is 3.5, 6.5, or 9.5 months, including a 15-day waiting period. This policy comes as an individual and family floater plan. The minimum sum insured is ~50,000, while the maximum is ~ 5 lakh, in multiples of ~50,000.
Supriya Rathi, whole-time director, Anand Rathi Insurance Brokers, says, "A claimant can claim hospitalisation expenses in his/her Corona Kavach policy or in the general health cover they may have, but not both. Also, bills need to be submitted and reimbursement is as per bills incurred."
Corona Rakshak
This policy works as a fixed benefit plan and pays the policyholder the entire sum insured upon hospitalisation due to Covid-19 infection for a minimum of 72 hours. You don't need to furnish bills, just proof of hospitalisation is enough, but there are a few limitations.
Chhabra says, "Corona Rakshak’s condition on a minimum of 72-hour hospitalisation is a major limitation since home treatment is the preferred choice of many asymptomatic and mildly symptomatic patients who can quarantine themselves at home while being treated."
All benefit-based policies pay out the entire sum insured to policyholders if they are diagnosed with ailments covered under the policies. It's available only as an individual policy.
Affordable alternatives
Arogya Sanjeevani, which is a basic, standard policy mandated by the Irdai, is a suitable alternative here. It's a fairly straightforward policy that comes with good coverage at a reasonable price. It covers Covid-19 and provides health cover up to ~10 lakh for health treatment of various illnesses. The approximate premium for a ~5 lakh sum insurance is around ~5,000 with coverage of 12 months.
When to buy
Note that all existing health plans cover the treatment and hospitalisation for Covid-19. Datta says, "Corona Kavach and Corona Rakshak policies do not substitute for your regular health insurance policy. A comprehensive health insurance policy was and will always remain a musthave in one’s financial plan."
If a person is looking to save his/her comprehensive insurance plan from any Covid-19 claims and aims to safeguard the entire sum insured for other diseases and medical requirements, then he/she can go for Covid-19 specific plans. Especially if a comprehensive plan has just ~5-7 lakh sum insured it may be insufficient for a family.
If senior citizens have comorbidity and vulnerability is high, an additional policy through Corona-specific cover will help save the base policy for another line of treatment. Corona Kavach can cover those who do not have any insurance and can’t afford to buy Aarogya Sanjeevani.