Low premiums, high claims: Covid covers vanish from market

Nagpur: The much-hyped Covid Rakshak and Kawach policies launched during the first wave of the pandemic, are absent from the market during the second wave. The Covid specific policies, which sold like hot cakes at both private and government general insurance companies, have quietly been put on hold these days.
Though the policies officially continue, insurance companies are preferring not sell them. The polices brought last year are being renewed but new customers are not being entertained. There are some companies in which the old polices are also not being renewed. TOI has come across a case in which the customer had raised the issue about non-renewal of his policy.
The polices came by the name Covid or Crona Rakshak and Kawach. The former gives cover of Rs2.5 lakh even if a patient just tests positive. This covers home quarantine also. The latter covers Covid treatment on reimbursement basis with a cap of Rs5 lakh. The average premium ranged not more than Rs3,000-4,000 for such policies.
Insurance companies now find the premium too less as compared to the sum assured. The policies were sold aggressively earlier but the calculations went wrong and the companies were flooded with claims leading to the current stance.
TOI inquired at four different general insurance companies, which confirmed the two policies were not available. Government companies still issuing the policies are rather cautious. Persons who had Covid are being discouraged and thorough health checks are being insisted on, apart from aspects like comorbidities being considered too.
“Yes, we are getting inquiries about the two policies from clients. But the company has decided to no longer make any fresh sales. Although existing customers are being serviced if they want an extension,” said a regional head at a private company.
At another private company, the concerned regional head said the polices were not available. Admitting that it was because of losses, the officials said clients are being convinced that they should take the regular cover.
“We are saying that Covid is a passing phase but if they take a regular health insurance plan it would cover other diseases including mucormycosis, which has emerged as a post Covid complication,” said the official.
However, the regular plans come for a higher premium, which ranges anywhere between Rs1,500 to 2,500 per lakh of the sum assured. Sources in the insurance companies said the low premium has led them to discourage sales of Covid specific policies.
Manoj Ray, a finance consultancy professional, said in his own case the policy which expired on May 7 has not been renewed. “I had taken the Rakshak policy which provided a straight cover of Rs2.5 lakh on testing positive. The private company flatly refused when I applied for extension. The matter was taken up with officials, who maintained the stance that the policy is no longer available,” said Rai.
His colleagues had also gone for the same policy, and even they have been refused extension, said Rai.
Prasanna Dani, a health care consultant, said the companies have been giving offline renewal but fresh sales have been stopped. Instead, regular health plans are being pushed.
“Our company is still providing the reimbursement policy, but only after due diligence,” said a source in a PSU insurance company.