IRDAI has directed insurance companies – life, non-life and standalone health insurers to offer a short term policy especially dedicated to covering the treatment cost of coronavirus from July 10, 2020.
With this, all insurance companies, be they life, health or non-life, can offer Corona Rakshak Policy which is a benefit based policy that pays fixed cost to a policyholder if he suffers from coronavirus.
Further, non-life and standalone health insurers can additionally offer Corona Kavach Policy. Kavach Policy is an indemnity based health insurance product that will cover the treatment cost of hospitalization.
We spoke to insurance industry officials and insurance advisors to understand which policy you should recommend to your clients. Let us see what they have to say.
Mayank Bathwal, CEO, Aditya Birla Health Insurance believes that agents should recommend both the policies depending on their existing risk coverage. “If a client has a regular indemnity based policy, he should buy Corona Rakshak policy to avail benefits of fixed cost. Remember that most indemnity based policy covers coronavirus. However, the first time buyer who does not have any health coverage should look at buying Corona Kavach policy.”
Ritesh Kumar, CEO, HDFC ERGO General Insurance feels that Corona Kavach is better than Corona Rakshak. While everyone should buy health insurance policy to get them covered against the coronavirus, customers should go for Corona Kavach policy as it covers hospitalization costs for the entire family.
Suresh Sadagopan of Ladder7 Financial Advisories said that the objective of taking such a policy is to protect oneself from financial expenses arising out of coronavirus. “I believe that the Kavach (indemnity policy) is better option as it offers enhanced sum insured of Rs.5 lakh as against maximum sum insured of Rs.2.50 lakh in Corona Rakshak policy. Also, the Kavach policy covers the entire family, which is critical in corona like diseases where chances of contamination to other family members is higher. In addition, it covers comorbidity i.e. disease that occurs due to primary disease (coronavirus in this case),” he added.
However, a few experts have a different opinion. Kulbhushan Nandwani, Director – Insurance, NJ India said that a benefit based policy is more suitable as most corona patients are being advised to get themselves treated at home. Indemnity policy can only be used if the patient is hospitalised. However, customers should opt for Corona Kavach policy if they don’t have any policy.
Mumbai insurance agent Ritesh Sheth told Cafemutual that instead of advising clients to buy Corona specific policies, it is better to recommend a regular health policy or topping up an existing policy which covers all diseases.
Krishnan Ramachandran, MD & CEO, Max Bupa Health Insurance said, "The Corona Kavach plan brings value to customers who want cover for Covid-19 related treatment costs. However, to provide maximum value to people, a comprehensive health insurance plan that protects against a wide range of illnesses including covid-19 will be more suitable. The Corona Kavach product has its own importance but it does not decrease the need of a comprehensive health insurance plan. Also, there are affordable plans available for people who want basic cover and can opt for either Aarogya Sanjeevani or a regular health insurance plan which also covers covid related treatment, as the need of the hour is a combination of products for short- and long-term benefits. People should be encouraged to buy comprehensive health insurance plans which fulfil the evolving health needs of people. Besides, it is also advisable to buy health cover with sufficient sum insured in the range of Rs.5-10 lakh as anything less would not suffice, given the inflating medical costs."
