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Expert speak: Should you buy standard COVID health insurance products?

The policy should not be taken as a substitute for a normal comprehensive health cover

July 02, 2020 / 10:01 AM IST

The insurance regulator has directed general insurers to offer uniform reimbursement-based policies from July 10 for covering the COVID-19 treatment. All insurers – life and general – can offer benefit-based policies to cover COVID-19 hospitalisation. Will these products work in favour of Indians gripped with panic around the disease and treatment costs? Industry CEOs and independent experts weigh in.

Ritesh Kumar, MD and CEO, HDFC ERGO General Insurance

The current pandemic has raised awareness among consumers about health insurance. The IRDAI has asked all insurers to launch COVID-19-specific health insurance policies for furthering the reach of insurance protection during the current situation. This policy will have common coverage across the industry, with a waiting period of 15 days and has varying tenure of up to 9.5 months. Considering its disease specific coverage being limited to COVID-19, the price point for this policy would be lower than the comprehensive health policy.

What this means for the consumers is that now they can choose from among three types of policies – comprehensive health policies which have been prevalent in the market; Arogya Sanjeevani, the base health insurance policy with uniform coverages across the industry launched with effect from April 1, 2020; and COVID-19-specific policies. Most comprehensive health policies as well as Arogya Sanjeevani already provide protection against COVID-19. The specific cover can be purchased either to further supplement the coverage under the normal comprehensive health policy or it can be bought to protect only against COVID-19 for affordability reasons. Having said this, the policy should not be taken as a substitute for a normal comprehensive health cover.

Kamlesh Rao, MD and CEO, Aditya Birla Sun Life Insurance


COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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In the current context, the insurance regulator’s thinking behind facilitating COVID-19-specific products is very opportune. After the lockdown, there will be a lot more movement of people. It seems like we are going to have to live with the virus than wish that it goes away. For policyholders, therefore, paying a single premium for a fixed benefit policy of up to Rs 2.5 lakh is an extremely beneficial proposition. They need not worry about what is payable and what will be excluded. Once they test positive and are hospitalised for at least 72 hours, the sum insured will be paid out. For insurers, the challenge will lie in pricing the product, as the data, across the world as also states and cities within India, is disparate. Generally, premiums are computed as per age bands but, at the moment, there is no established data on age-wise trends on the contraction of the infection or recovery rates.

Anamika Roy Rashtrawar, MD and CEO, IFFCO-Tokio General Insurance

The existing health insurance policies do not cover special treatment zones like home quarantine, makeshift hospitals, etc., as prevalent in the current treatment protocol of the COVID-19 pandemic. So, a specific product for COVID19 is the need of the hour.  We welcome the recent IRDAI guidelines on the COVID19-specific cover. The IRDAI guidelines have standardised the wordings leaving no room for any discrepancy in the coverage. This is a significant benefit to consumers seeking such specific covers. The products can be offered for various short-term periods as well as an annual cover.

The dedicated COVID19-specific policies are available in both - indemnity and benefit-based covers. The premium for these products will be decided by each insurance company as per their actuarial estimations. However, customers can be certain that claim payments for the treatment will be based on the standardised terms, which otherwise would be debatable under normal policies.

Mahavir Chopra, Founder,

The indemnity policy has ticked many right boxes in providing a special financial cover to people from the risk of COVID-19. It covers several gaps and grey areas – for instance, eliminating the room rent limits, covering PPE, gloves, masks, ventilator, home care with prior approval – that exist in a regular health insurance policy for adequately covering a Covid-19 hospitalisation. The clarification on coverage for patients with a co-morbid condition, including pre-existing co-morbid conditions, is also a good step.

There are areas where policyholders will still have to wait and watch. For instance, whether the underwriting process would be simple especially for the vulnerable population, the senior citizens, people with pre-existing diseases or people in close contact, or risk of Covid-19. Second, how soon will the product be available online, and third, the relative price of this product compared to the regular long-term health insurance covers available.

Mrin Agarwal, Founder-Director, FinSafe India

If you have low or no cover, it makes sense to buy dedicated COVID-19 policies. Premiums, too, are likely to be reasonable as they cover only treatment of COVID-19 and co-morbidities. These policies can take care of shortfalls in your regular policy as they provide cover for actual – room rent, intensive care unit (ICU), consumables etc. – expenses, which may not be the case in the comprehensive policy. However, before buying one, you must evaluate your current cover to understand the list of exclusions, room rent sub-limits and other restrictions. If your family’s current floater health cover is Rs 3-5 lakh, it is likely to fall short in the current situation. You can consider COVID-19 plans as add-ons to your existing health cover.

Raj Khosla, Founder and Managing Director,

 If you have an adequate family floater plan of up to Rs 10 lakh, you do not need to buy an additional COVID-specific policy. Your current insurance will meet treatment and hospitalisation charges for all diseases, including Covid-19. However, if you are under-covered, taking an additional insurance plan for pandemic risk is a must. A niche health insurance product such as a COVID-specific plan is not an alternative cover for an individual or family floater health plan. Even a first-time insurance buyer should opt for an IRDAI-approved standard health insurance plan (Arogya Sanjeevani), which offers comprehensive medical coverage against all diseases, including COVID-19.
Preeti Kulkarni
first published: Jul 2, 2020 09:51 am

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