The insurance regulator – Insurance Regulatory and Development Authority of India (Irdai) – has finalised the guidelines for standard covid health products after a series of draft regulations were issued by it to the insurance companies in the past one month.
Non-life insurers, which include standalone health insurers have to offer two products – Covid Standard Health Policy (Corona Kavach) and Covid Standard Benefit based health policy (Corona Rakshak) to consumers from July 10.
Earlier, the regulator had toyed with idea of an indemnity-based product from June 15 specifically for Covid-19, but later the draft guidelines were revised and it asked insurers to offer a benefit-based product instead for Covid-19 by June 30. The regulator then revised the draft guidelines for the third time and asked insurers to provide two products instead of one – a benefit based and the other, indemnity based.
In the final guidelines, the Corona Kavach policy will come with a base cover that will be offered on an indemnity basis and an optional cover that will be made available on a benefit basis. This indemnity policy will cover the hospitalisation expenses incurred by the insured person for the treatment of Covid-19 on positive diagnosis. All costs relating to room, boarding, nursing expenses, medical consultation including telemedicine, consumables such as PPE kits and intensive care unit will be covered under the policy.
It will also include the cost of treatment for any other co-morbidities, including pre-existing comorbid conditions along with the treatment for Covid-19.
The regulator has not set a ceiling on the cost of room and ICU in the policy. However, a maximum of Rs 2,000 will be covered as far as expense on ambulance is concerned. Moreover, home care treatment will also be covered by insurers in case the insured person avails treatment at home for a maximum of up to 14 days.
The optional cover under Corona Kavach will pay 0.5 per cent of the sum insured per day for each 24 hours of continuous hospitalisation for treatment of Covid-19 following an admissible hospitalisation claim under this policy. The benefit shall be payable for a maximum of up to 15 days during a policy period in respect of every insured person.
The minimum sum insured for Corona Kavach will be Rs 50,000 and it can go upto Rs 5 lakh. The policy will come with a tenure of three and half months, six and half months and nine and half months, including waiting period and there will be a single premium.
The Corona Rakshak policy will be a standard benefit based policy where a lump sum benefit equal to 100 per cent of the sum insured shall be payable on positive diagnosis of Covid-19, requiring hospitalisation for a minimum continuous period of 72 hours. It will come with a minimum sum insured of Rs 50,000 and have a maximum sum insured of Rs 2.5 lakh.
The Rakshak policy also comes with a tenure of three and half months, six and half months and nine and half months, including waiting period and there will be a single premium.
While the policy wordings and the benefits received will be uniform across all insurers, the pricing of the product has been left to the insurers. Experts say, the standard product will be cheaper than other comprehensive health products and the benefit based Covid-19 product will be priced higher than the indemnity product.
“The hallmark feature of these products is the uniformity of the policy wordings across the market. Claims management will be an important aspect of these products and insurers are working closely with the General Insurance Council to bring some rationalisation in the treatment costs”, said Milind V Kolhe, Chief Underwriting and Reinsurance Officer, Bharti AXA General Insurance.
“These policies will cater to people who currently don’t have a holistic health insurance policy and are looking to cover themselves against Covid-19. The policy coverages, terms & conditions are standard across insurers; the USP would be wide network of hospitals for cashless facility”, said Rashmi Nandargi, Head – Retail Health Underwriting, Bajaj Allianz General Insurance.
Explaining the logic behind two products, experts said that if anyone had a normal health product, they could take the benefit-based product and on testing positive, they would get a lump sum amount. The benefit-based product could be taken as a supplementary product. However, if one did not have a product, then opting for the indemnity based product made sense.