As the second wave hits the country with the deadly Coronavirus and the positive cases show a continuous spike, the Insurance Regulatory and Development Authority of India (IRDAI) extended the timeline to offer and renew short term COVID-19 specific health policies, ‘Corona Kavach’ and ‘Corona Rakshak’ up to September 30, 2021.
From their inception, the policies saw a 15 per cent growth in sales and most investors were buying the policy for a period of 9.5 months last year. Between July and August, more than 1.5 million lives were covered under both the COVID-specific policies.
Now the question which arises is what exactly are these COVID-19 specific insurance policies and should you consider buying them?
IRDAI came up with these policies from July 10, 2020, to meet hospitalization costs arising out of COVID-19 and help people with better health insurance coverage in their fight against the Coronavirus pandemic.
What is ‘Corona Kavach’?
It is the indemnity-based COVID-19 policy that will cover the cost of treatment of any comorbid conditions, including pre-existing conditions, along with the treatment for the Coronavirus infection or disease with the tenure ranging from 3.5 months to 9.5 months. An indemnity contract reimburses the policyholder for hospitalisation costs up to the amount covered.
What is ‘Corona Rakshak’?
It is a single-premium plan that will pay out 100 per cent of the amount covered as a lump sum if the policyholder is hospitalised at least 72 hours after testing positive for COVID-19.
Now that you know the basic difference between the two policies, let’s get into the details.
Who offers them
Both general and health insurance providers are required to offer the Corona Kavach policy, which is the COVID-19 standard health policy. However, life insurance companies cannot offer them.
To buy Corona Rakshak policy, which is a standard benefit-based policy, one may approach any insurer including the life insurance company.
The base coverage in the Corona Kavach Policy will apply only when there is a hospitalization of a minimum period of 24 hours. Irrespective of the number of days in the hospital, the hospital expense up to the sum insured will be paid as claimed by the insurer.
However, hospitalisation for a minimum of 72 hours is required in Corona Rakshak policy.
Types of Corona Rakshak Policy
Corona Kavach can be bought on an individual basis and as well as on a family floater basis.
But, Corona Rakshak does not offer the option of a family floater hence, can only be bought on an individual basis.
Minimum and Maximum
The minimum sum insured under the Corona Kavach policy is Rs 50,000 and the maximum is Rs. 5 lakh with the tenure ranging from 3.5 months, 6.5 months and 9.5 months including the waiting period. There is also a five per cent discount for healthcare workers.
While for the Corona Rakshak policy, the minimum sum insured is Rs. 50,000 and the maximum limit shall be Rs.2.5 lakh which will carry the same tenures that of Corona Kavach inclusive of the waiting period.
Nature of policy
The Corona Kavach Policy comes with two covers. One basic cover offered on an indemnity basis and the other being an optional cover which is available on a benefits basis. The premium payable towards this optional cover will have to be paid separately so as to enable policyholders to choose and pay based on the need. In an indemnity cover, the claim is paid as per the hospital bills while in a benefit cover, the entire sum insured is paid to the policyholder.
Corona Rakshak offers fixed compensation upon the diagnosis with COVID-19 irrespective of the medical expenses incurred. The policy will cease to exist once the claim is paid out.
The base cover of Corona Kavach offers hospitalisation expenses like room and boarding charges along with PPE kits, gloves, masks and other similar expenses and even AYUSH treatment.
Among other things, the policy also protects home care treatment costs for up to 14 days if it requires an intensive line of treatment that is performed under the recommendation of a medical practitioner. Other costs such as the purchase of a pulse oximeter, an oxygen cylinder, and nebulizers would all be covered.
On the other hand, Corona Rakshak covers the lump sum amount.
The Corona Kavach Policy allows the addition of ‘Hospital Daily Cash’ coverage. It provides that the insurer will pay 0.5 per cent of the amount covered every day for every 24 hours of sustained hospitalisation for COVID care after an admissible hospitalisation demand under this scheme. The benefit shall be a payable maximum of up to 15 days during a policy period.
However, there is no such feature in Corona Rakshak policy as it is entirely a benefit-based plan.
According to the IRDAI, the premium for both goods will be charged on a pan-India basis, with no geographic area or zone-based pricing permitted. These plans also do not have the option of paying premiums in increments. Both policies shall come with 15 days waiting period, during which no claim will be accepted.
Both the policies have a minimum age entry of 18 years and the maximum is 65 years. Dependent children shall be covered from the age of three months to 25 years.
Since it is short-term health insurance, rules such as lifelong renewability, migration, and portability shall not apply to these products.
Policyholders can avail of the services on a cashless basis, which shall be arranged by the insurer through network providers.