Global pandemic COVID 19 started from Wuhan city in China and spread rapidly to whole of the world within weeks. We have seen countries like Italy and the United states with best of medical infrastructure and professionals succumbing to this deadly virus. Within a very short period of time we have witnessed exponentially increasing number of infection cases and death tolls throughout the world. In India we faced a complete lockdown of 21 days, which is one of its kind in history, to prevent the spread of corona virus to a country with a huge population density like ours. Even after the lockdown the infection and death cases are steadily rising in every states and union territories of our country.
Insurance industry has played its part and responded to this grave situation. IRDAI issued a circular on 4th of march to deal with the virus-related hospitalization claims carefully and expeditiously. In this circular the authority advised the insurers to design health insurance products covering the costs of treatments of Corona virus. Although normal health insurance policies covering hospitalization covers the treatment due to COVID 19, many insurers responded to the directions of IRDAI and filed unique corona virus related products as need-based products under sandbox regulations of IRDAI. We will analyse some of these Corona Virus specific insurance products launched recently in our present article.
Digit Insurance had started a COVID product called health care plus with sum insured in multiples of 25k, starting from 25k upto 200k with lowest premium 299 and highest premium 2392 (plus GST). Anyone upto 75 years was eligible to take this policy. This product excluded pre-existing diseases and had an initial waiting period of 15 days. This means this product was not for people already showing some respiratory symptoms. Also, this policy had a travel history exclusion to specific countries e.g. China where corona virus cases are in good numbers. Even if you contract the disease from some family member who had travelled to these specified countries you will not be covered. It paid full sum insured for hospitalization cases and half of the sum insured for quarantine cases. This product got a very good response and was heavily sold online amid the lockdown. But as they sold policies nearing to what has been maximum stipulated by IRDAI under sandbox regulations, they had to stop this product and is not being sold currently.
Star health launched its Star Novel corona virus insurance policy with two sum insured options of 21k and 42k at premium of 459 and 918 (plus GST) respectively. A lump sum payment of sum insured as opted will be made on inpatient hospitalization after initial waiting period of 16 days. This policy will be available for people with travel history but people above 65 years cannot opt for this product.
Future Generali launched a COVID targeted group insurance product with lumpsum benefit 100% for confirmed infection and 50% pay out for quarantine cases. Incidental expenses of 10% will also be paid for quarantined people. No past medical and travel history is required to buy this product.
ICICI Lombard launched a similar product named COVID 19 protection cover with 25k sum insured and at a premium of 149 (plus GST). It can be opted by people of age group of 18-75 years and has an initial waiting period of 15 days. Pay-out of 100% sum insured will be made on diagnosis itself without caring for hospitalization. Travel history exclusion is a feature of this product. A similar product was provided to shopkeepers by ICICI Lombard in collaboration with Bharat Pay costing 199 for 25k sum insured.
As we have already reiterated above that a regular health insurance policy works perfectly fine for virus infectious diseases and there is no need to go for a disease specific policy covering corona virus, if one has sufficient health insurance in place. Normal health insurance policy also covers the cost of test for corona virus if it comes positive and further results in inpatient hospitalization. Otherwise the cost has to be borne by the insured. It also covers for necessary medical treatment during the quarantine period as per policy terms and conditions. For quarantined patients who are not hospitalized a regular health policy may have some limitations which can be taken care of by opting for a COVID specific policy. Also, a regular health insurance policy may have some higher waiting period for the infectious diseases which make these newly filed need based COVID 19 products with lesser waiting periods very relevant in the current scenario. These COVID specific products can be specifically useful for senior citizens or people who don’t have an ongoing health insurance policy but looking to purchase some kind of cover in the light of the panic of this emerging epidemic.
It should be also noted that any death cases arising out of corona virus will be covered by your life insurance policies in place. The death benefit payment will be paid by your life insurer if someone contracts COVID 19 and dies as per policy terms and conditions. Personal accident policies will not cover the same as the death is due to a disease and not an accident.
The health awareness created by COVID 19 will have a long lasting effect on health insurance products and the insurance industry in terms of demand, policy conditioning and pricing which will be more clearer in the coming time.