Standardised ‘Corona Kavach’ & ‘Corona Rakshak’ health insurance products from July 10

You will be able to buy standard COVID-19 health insurance policies with uniform features, terms and conditions from any insurer from July 10. You can choose between indemnity, or reimbursement, plan – to be mandatorily provided by general insurers - or a benefit-based plan, which can be offered by life insurers too. The premiums will be determined by the insurers.

The standard indemnity-based COVID-19 policy will be named Corona Kavach, followed by the name of the insurer. Despite being COVID-19-specific policy, it will cover the cost of treatment of any co-morbid conditions, including pre-existing conditions, along with the treatment for Covid-19, the insurance regulator said. The benefit-based policy will be termed ‘Corona Rakshak’.

The Insurance Regulatory and Development Authority of India (IRDAI) on Friday (June 26) finalised the guidelines for these products. An indemnity plan reimburses hospitalisation expenses actually incurred by the policyholder to the extent of the sum insured. A benefit-based plan, on the other hand, hands out a pre-agreed lump-sum upon diagnosis.

Significantly, while it is mandatory for general and health insurers to provide the reimbursement-based standard COVID-19 product, offering benefit-based product is optional for all insurers.

The Corona Kavach policy will have one basic mandatory cover, which will be indemnity-based and one optional cover that will be benefit-based. The basic cover, with sums insured ranging from Rs 50,000-Rs 5 lakh, will come with tenures of three-and-half months, six-and-half months and nine-and-half months. Including the waiting period.

Those between 18 and 65 years of age can buy this product, which will be also be offered as a family floater to cover parents, parents-in-law and dependent children up to the age of 25 years. This will be a single premium, limited period policy without any lifelong renewability benefits.

Policyholders can file a claim under this product if they are hospitalised for COVID-19 treatment after testing positive at a government-authorised diagnostic centre. It will cover room, boarding and nursing costs as also expenses related to Intensive Care Unit, surgeons, anaesthetists, specialists and so on. Oxygen, ventilator, diagnostic charges will also be paid for.

Insurers cannot exclude the cost of PPE kits, gloves and masks, which has been the major bone of contention in COVID-19 times.

Moreover, the product will also cover home care treatment expenses of up to 14 days if it involves an active line of treatment and is done on a medical practitioner’s advice, among other conditions. Cost of pulse oximeter, oxygen cylinder and nebulisers will also be covered.

The optional cover, for which policyholders will be charged additional premium, will pay 0.5 per cent of sum insured per day of hospitalisation for up to 15 days. This optional rider can come in handy for meeting sundry expenses not payable under the basic policy.

Named Corona Rakshak, the single-premium plan will pay out 100 per cent of the sum insured as lump-sum if the policyholder is hospitalised – at least for 72 hours - after testing positive for COVID-19. The sums insured under the product, which will carry tenures of 105 days, 195 days and 285 days, will range from Rs 50,000 to Rs 2.5 lakh. The policy will cease to exist once the claim is paid out.

Since product features and terms are standardised, premium and cashless hospital network will be the key determinants once insurers start rolling out the products.

The dedicated policies can be a good starting point for those looking for cheaper covers to tide over the COVID-19 panic. Since cost of PPE, masks and gloves as also home healthcare are clearly covered, it will offer comfort to policyholders. The 72-hour hospitalisation requirement in the benefit-based product remains a sore point at a time when treatment at home is being seen as solution to ease pressure on hospitals.

However, even such individuals would be better off buying comprehensive health insurance covers with minimal restrictions and sub-limits. Health insurance policies need to be purchased with a long-term perspective since you would need them the most as you grow older. The COVID-19-specific standard covers are limited period products, while regular policies come with lifelong renewability feature.