Probably Covid-19 is the major pandemic that humankind is facing in the history which impacted almost every sector all over the world. Several months passed already since the initial outbreak happened and now we can say there no such place in the world with zero impact of Covid-19.
Even rich countries like the USA, Italy, and Russia are facing difficult times. As a developing country, India is struggling in various sectors. Particularly those dependent on daily income, small businesses are impacted the most.
Even though the Government of India took timely steps to control the Covis-19 spread, keeping the economy in mind continuing the full lockdown was impractical and the Government had to ease the lockdown rules step by step and finally released it fully. Now after the lockdown call off the control is only in the hands of the general public.
This is the first time in history in recent years that humankind is facing this much struggle. We are not used to such situations. When an uncertain thing happens and at the same time if daily living also becomes challenging, it is human tendency to panic.
Compared to the times in lockdown now the chances of catching the infection is high, and the only preventive measure we have on our hand is self-care and protection. The situations now have changed the medical and general expenses that are incurred in consumables if we have to undergo hospitalization. Baring high costs for medical treatment can affect the financial condition of individuals particularly those under the low-income groups or middle-class population.
Generally, percentage of people that purchase health insurance is very low in India. People buy health insurance if they are typically afraid of serious illnesses like cancer, diabetes, cardiac issues, etc. But the Covid-19 spread has changed the scenario. Despite the dedicated efforts from medical staff and govt. in India, it looks unclear to common man how helpful these facilities can be if he or someone in his family catches the infection.
Considering better medical care it is a common tendency to choose private hospitals instead of going to govt. hospitals. Considering the high costs incurred in the Covid-19 treatment it can make a person financially poor if he has to spend it out of pocket. Considering all these factors, people are showing interest to take a health insurance policy that covers medical expenses.
Based on the IRDAI (Insurance Regulatory and Development Authority) all general health insurance policies have started to cover the treatment expenses depending on the terms of the policy. In general, the Covid-19 condition comes under the respiratory-related health issue which is already covered in normal health insurance plans in the market that exist before the pandemic issue.
But a few points to consider here are, these normal health insurance plans also cover medical costs incurred in several other health issues depending on the terms mentioned in the policy. A typical health insurance policy for a small family may cost around Rs.1000 per month which is still expensive for people in the low-income group in developing county like India.
Do normal Health Insurance plans cover Coronavirus treatment costs?
The answer is yes, it is clarified by IRDAI that all existing health insurance policies in the market would cover the hospitalization expenses for Covid-19 also. If one has a health insurance policy already or planning to take a health insurance policy that already there in the market, they do cover the Covid-19 treatment also. If someone is planning to take health insurance keeping long term benefits and coverage for other health issues also, it is good to choose the plans that are already there in the market.
But as per the general terms of health insurance plans, they can be claimed only if the patient is admitted into the hospital and only if the duration of hospitalization extends 24 hours. Moreover, there will be a cooling period of 30 days for newly purchased plans which means the insurance company will not provide the coverage for non-accidental conditions in this cooling period.
So what is the main intention of bringing the new type of policies?
The treatment of Coronavirus is different compared to normal health issues and the costs incurred in this treatment are more for consumables like PPE kits, gloves, masks, oxygen cylinders, oximeters, nebulizers, etc. which are generally not covered in normal health insurance policies as per the terms and condition mentioned in the policy documents.
The main reason is such expenses are classified as non-medical expenses. Moreover, if the patient is home quarantined or isolated in quarantine centers where the patient is not hospitalized comes under non-hospitalization which is not covered as per the current terms of health insurance policies.
Situations before the pandemic were different in the health insurance industry. Earlier, as per the IRDAI norms, insurance companies could only sell only long-term policies. But now the IRDAI has declared all the health insurance providers to offer short term policies that can span from 3 months to 11 months to target Covid-19 coverage.
Keeping the low-income group and those who want to take short term health policy that helps to cover the medical expenses incurred in Covid-19 treatment, IRDAI had recently compelled all general health insurance providers in the market to offer Covid-19 specific plans that cover medical expenses for coronavirus treatment.
IRDAI has instructed all insurance companies to provide two new policies called Corona Kavach and Corona Rakshak with standardized guidelines to cover coronavirus treatment starting from on or before July 10th of 2020. Corona Kavach is a mandatory indemnity plan and the Corona Rakshak serves as an optional benefit based plan.
The main goal behind this declaration is to provide affordable health insurance policies for the layer of the population that simply can’t afford the regular health insurance policies and for those that don’t have any health insurance already. Unlike the regular health insurance plans, these plans will be of short span and will don’t have facilities like life-long renewability, bonus, etc.
What is covered under the Corona-specific health insurance plans?
Let’s explore some basic points that are included and excluded in these short-term corona-specific policies.
- These policies would be for a short span only and would not have the option of renewal.
- They are offered as 3.5 months, 6.5 months, and 9.5 months plans.
- The entry age bracket to take these policies is 18 years to 65 years.
- The plan can be taken for a maximum of 10 members in a family.
- People with co-morbidity can also take the policy, but with some additional charges.
- No pre-medical examination is required to take the policy which is an added advantage to purchasing it online.
- Waiting period for these policies is 15 days. And those who are already tested positive cannot benefit from these policies and is applicable only if you got infected after the waiting period of 15 days and are tested positive.
- The maximum cover offered under Corona Kavach is Rs 5 lakhs and for Corona Rakshak it is Rs 2.5 lakhs. Minimum sum insured in both the plans is 50,000.
- The main difference between the two plans is Corona Kavach is an indemnity-based plan which only reimburses the hospitalization bills and the Corona Rakshak is a benefit based plan which means 100% of the sum insured is paid to the policyholder.
Differences between Corona Kavach and Corona Rakshak
Both Corona Kavach and Corona Rakshak are designed to cover the hospitalization expenses for coronavirus treatment. But what are the differences, why two types of plans? Which one is good, which one has more benefits. Let’s see.
|Corona Kavach||Corona Rakshak|
| Corona Kavach is an Indemnity-based plan. It covers only the hospital|
| Corona Rakshak is a benefit based plan. 100% of the sum insured is|
paid to the policyholder.
| Corona Kavach is a standard plan that all general and health|
insurance companies should offer. Life insurance companies cannot offer the
| Obviously, general and health insurance companies offer them. Even|
life insurance companies can offer this plan
| This plan is being implemented by almost 29 companies. IRDAI has|
asked to launch it on or before 10th July 2020.
| This has to be launched yet as IRDAI has not set any deadline as of|
now, but mentioned to offer preferably by 10th July of 2020.
|Minimum coverage is same in both plans. It is 50,000.||Minimum coverage is same in both plans. It is 50,000.|
|Maximum sum insured is 5 lakhs.||Maximum sum insured is 2.5 lakhs.|
| This plan will apply only if the patient has to stay in hospital for a|
minimum of 24 hours. Expenses for the hospital are paid irrespective of days
| This plan will apply only if the patient has to stay in the hospital|
for a minimum of 72 hours continuously.
| It is an indemnity based plan. In an indemnity, cover claim is paid as per hospital bills. It shall have one basic mandatory cover and one optional cover.|
Premium payable towards the optional cover has to be paid separately to
enable policyholders to choose and pay based on need.
|It is a benefit based plan. In a benefit plan, the fixed compensation is paid to the policyholder provided met the terms as mentioned in the policy. patient should be tested positive and minimum hospital stay of 72 hours.|
| Corona Kavach is available on both individual and family floater|
| Corona Rakshak is available only on an individual basis. No family|
floater option is available.
| This plan offers an option to add Hospital Daily Cash cover.|
Insurer will pay 0.5% of the sum insured per day for every 24 hours of
continuous hospitalization for the treatment of COVID. These benefits shall
be payable up to a maximum of 15 days during the policy period.
| No Such feature is available because it is entirely a benefit-based|
| In both policies co-morbidity arising out of Covid-19 treatment is|
If you are planning to take the Corona specific plan, it is always a good idea to go for a high sum cover as both offer co-morbidity also. In terms of choosing the duration of the plan, it may be a good idea to choose a longer duration in the current situation of on-going virus incidence.
But these Corona-specific plans are targeted for Coronavirus treatment costs and shall not be mistaken as a replacement for regular health insurance plans. But if someone already has the regular health insurance plan, these plans can be considered as supplementary cover for Covid-19 treatment.
These plans are great relief to those who cannot afford the huge premiums of normal health insurance plans and who want to take insurance that is specific to coronavirus treatment. Taking these policies can help the individuals to be secure financially and at the same time be prepared if they or someone in their family catches the infection in this uncertain situation of the pandemic.