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COVID-19: Indians look to insure themselves against the virus

Insurance companies say inquiries have increased by 20 percent since the outbreak

March 03, 2020 / 08:41 PM IST

Deepti Roy, a 42-year-old IT professional from Kolkata, was in two minds about renewing her health insurance policy. However, with the coronavirus outbreak triggering a worldwide panic and her recent official trip to Hong Kong prompted her to continue with the policy.

"While I do not have any symptoms, but it is a fact that hospitalisation expenses are high. Plus renewal rates are also more attractive (due to discounts),” she told Moneycontrol.

With three new cases in India, the COVID-19 has led to a renewed scare. Though the situation is under control in India, people are beginning to look for medical insurance.

Also Read: You can now buy medical insurance to cover COVID-19

While insurance companies did not quantify the exact health policies sales increase owing to the COVID-19 scare, distribution officials said that there has been a 20 percent increase in the number of inquiries.

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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The fourth quarter of the financial year is also the most popular when it comes to purchasing medical insurance. Salaried professionals buy products to claim tax exemption and companies also offer special premium rates. This year with the threat of COVID-19, the thrust to buy health policies is higher.

Anurag Rastogi, Chief Actuary & Chief Underwriting Officer, HDFC ERGO General Insurance said that the company is observing growth in the purchase of health insurance, which is usually seen during the period of January to March each year.

"While this growth may not be directly attributed to the incidences of Coronovirus, consumers are waking up to the thought of either buying a health insurance policy or questioning whether their existing policy covers them in case they contract the virus," he added.

Why health insurance?

When it comes to COVID-19, health products will cover hospitalisation expenses if it is for a minimum of 24 hours. Also considering that it is an epidemic there would not be any pre-existing waiting period for Coronavirus.

"Epidemics cannot be pre-existing and hence it will be treated as an independent incident," explained Sanjay Datta, Chief-Underwriting, Claims, Reinsurance and Actuary, ICICI Lombard General Insurance.

Health insurance products cover claims related to surgical procedures during hospitalisation as well as allied expenses like room rent. In India, while tests for COVID-19 are free, hospitalisation expenses for confirmed cases have to be borne by the patient.

A medical insurance would come handly in these scenarios. Considering that it is a special cases minimal exclusions would be applicable.

Vikas Mathur, Head- Health Marketing, Universal Sompo General Insurance, said that since the treatment of such diseases includes being quarantined and is part of symptomatic medical management, this itself can lead to compounding of expenses.

Here, specialised medicines and treatments could lead to lakhs of rupees in hospital bills within a few days. Mathur added that individuals can opt for top-up medical insurance policy to increase their health cover at a reasonable pricing.

But will all claims be covered?

Only the hospitalisation claims are likely to be covered. Any medication prescribed or secondary infections caught during the test process would be excluded.

Subramanyam Brahmajoysula, Head-Underwriting and Reinsurance, SBI General Insurance, said that claims due to corona virus are payable provided the concerned person is hospitalised for at least 24 hours.

"Most of the health insurance policies in India do not cover outpatient treatment. However, if COVID-19 corona virus is declared as a pandemic by the World Health Organisation or Indian government, then claims may/ might not be payable as such claims are excluded under many health insurance policies,” he added.

Pandemics are excluded from insurance coverage because they are considered a high-risk item with unnaturally higher level of claims.

M Saraswathy
M Saraswathy
first published: Mar 3, 2020 04:03 pm