Published in Livemint.
With the vaccine for covid-19 months away and the cases still on the rise, the Insurance Regulatory and Development Authority of India (Irdai) earlier this month asked insurers to allow policyholders to renew, migrate or port covid-specific health insurance schemes.
Corona Rakshak and Corona Kavach plans were launched from 10 July 2020 onwards with an aim of providing better coverage to policyholders amid the pandemic (read here bit.ly/3mkLW2z). The policies were launched with tenors of 3.5, 6.5 and 9.5 months, which means that if you had taken the shortest tenor policy, your cover will soon end.
Corona Rakshak is a fixed-benefit policy, which pays 100% of the sum insured if the policyholder tests positive for covid-19. The policy terminates thereafter. Corona Kavach is an indemnity policy (pays based on the treatment cost), which gives a cover of ₹50,000 to ₹5 lakh.
Covid-specific policies have seen positive uptake primarily due to their low cost and better disease-specific coverage. “People who cannot afford to buy a comprehensive cover may continue to stay protected against covid-19, at least by renewing their existing policy,” said Amit Chhabra, health business head, Policybazaar.com, an online insurance marketplace.
But experts advise taking a comprehensive plan. “Individuals should opt for a comprehensive health indemnity policy, which provides better coverage in case of medical exigencies and complications, including treatment for covid,” said Gurdeep Singh Batra, head–retail underwriting at Bajaj Allianz General Insurance.
We tell you what you should keep in mind when renewing, migrating or porting your covid-specific plans.
Irdai has allowed policies to be extended for further terms of 3.5, 6.5 or 9.5 months, up to 31 March 2021, but the renewal can only be done before the expiry of the existing policy contract.
The advantage is that in case of renewal, the waiting period of 15 days will not be reimposed. According to Abhishek Bondia, managing director and principal officer, SecureNow.in, an insurance broker, the big advantage of renewing a covid-19 policy is the waiver of the waiting period. “Corona Kavach’s coverage is more comprehensive than what standard health plans offer. Also, the premium of several insurers is highly competitive. So, renewal ensures a wider coverage in a cost-effective way,” he said.
While renewing Kavach or Rakshak, check if you have adequate sum insured because the treatment for covid-19 can run into several lakhs in certain cases. Though Irdai has allowed changing the sum insured of a covid-19 policy, but the waiting period will start afresh for the enhanced amount.
“Ensure that you stay covered for the maximum time period of 9.5 months,” said Chhabra.
If you want wider coverage, you will now have the choice to migrate your Corona Kavach or Rakshak policy to any other indemnity-based health product offered by the insurer. Moreover, the accrued gains of the waiting period served in the existing policy will continue for covid-19-related treatment in the new policy.
“The most important benefit of migrating to a comprehensive policy is that policyholders will get adequate coverage for all possible illnesses and ailments including covid-19,” said Chhabra.
However, most standard health policies do not cover stay-at-home treatment, which may be required for the treatment of a covid infection. Corona Kavach covers this up to 14 days per incident.
Also, standard policies come with many clauses such as sub-limits (cap on expenses), co-payment (where you need to bear a specified percentage of the claim), waiting period of one or two years for pre-existing diseases (PED) and deductibles (the amount you pay before the policy starts paying). Make sure you understand these before migrating to a comprehensive policy.
“While migrating to a comprehensive cover, do make sure that you buy a plan with an adequate sum insured which must be enough to meet the healthcare needs of you and your family,” added Chhabra.
Policyholders will now be able to port their existing covid-19 policies if they are unhappy with the service offered by their current insurer. According to Irdai, the insurer will have to protect the waiting period served in the existing policy.
While there is no big advantage of porting Corona Kavach or Rakshak as the benefits are quite similar across insurers, you can choose to port to a comprehensive cover by another insurer.
“You can port your plan from covid-19-specific policy to standard indemnity policy or to covid-19 specific policy also. Moreover, benefits earned during your policy period with your current insurer such as waiting periods will be carried forwarded, and with porting you can increase your sum insured and also your policy tenure,” said Batra.
However, remember to check the claim settlement ratio of the new insurer along with the number of network hospitals it has.
Remember that a comprehensive health plan is a must-have for everyone as it gives wider coverage. Covid-specific policies can be taken in addition to cover high-cost consumables and stay-at-home treatment that comprehensive plans may not cover in case you get the infection.