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IRDAI allows insurers to offer short-term health policies against COVID-19

IRDAI asked the insurers to devise inclusive short-term health insurance products "where waiting periods are part of the product, such waiting period shall not exceed 15 days".

June 23, 2020 / 07:45 PM IST

Amid mounting COVID-19 cases in the country, regulator IRDAI on Tuesday allowed the health and general insurers to offer short-term health insurance policies that will give coverage against the coronavirus infection. With an objective of making available insurance protection to various sections of people in the prevailing COVID-19 pandemic, it is considered that short-term health insurance policies providing coverages specific to COVID-19 disease is the need of the hour, it said in a circular.

Accordingly, all insurers (life, general and health) are allowed to offer COVID–19 specific short-term health insurance policies subject to the guidelines, said the Insurance Regulatory and Development Authority of India (IRDAI).

"Short-term policies may be issued for a minimum term of three months to a maximum term of eleven months.

"In between three months and eleven months, the policy term shall be in multiples of completed months," it said while issuing the guidelines.

However, a policy term less than three months is not permitted.

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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.

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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.

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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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IRDAI asked the insurers to devise inclusive short-term health insurance products "where waiting periods are part of the product, such waiting period shall not exceed 15 days".

Life insurers are permitted to offer only benefit based short-term health insurance policies while general and health insurers can offer both indemnity based and benefit-based policies.

The guidelines will remain valid for issue of short-term policies till March 31, 2021 unless extended further.

As per the guidelines, short-term health policy means any health insurance policy contract which has been issued for a policy term of less than 12 months.

Short-term policies can be offered both as individual or group products, the circular said.

Earlier in March, IRDAI had asked the general and health insurers to design need-based products covering costs of treatment of coronavirus disease.
PTI
first published: Jun 23, 2020 07:44 pm

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