Taking Cover . Corona Kavach: With stark difference in premium among policies, which should you go for?

If you are looking to shield your finances from Covid-19 and hunting for health insurance covers, the standard Covid-19 policies launched by insurers under instructions of insurance regulator IRDAI, should be your choice.

In an article dated April 18, “Fight Covid-19 with the right cover”, we had pointed out that regular health insurance policies are a better choice vis-à-vis the special Covid-19 plans of insurers that were launched as early as March, given that regular health plans are more comprehensive and offer a higher sum insured (SI). But, as it turned out, insurance companies do not cover expenses on PPE (personal protective equipment) kits, masks and gloves and other consumables under their regular health plans. Also, when one is treated for Covid-19 in a quarantine facility or a makeshift hospital, the regular plans do not pay claims.

On June 26, the IRDAI came out with an order mandating insurers to offer an indemnity cover for Covid-19 on terms standardised by it. This plan, it said, should pay for expenses on PPE kits, gloves, mask, ventilator charges, and costs towards diagnostic tests and home-care treatment without any conditions or deductibles, and be done by July 10. It also said that insurers should cover co-morbid conditions under the policy and give options for a term of 3.5, 6.5 and 9.5 months (in every term, 15 days is waiting period) with cover options of ₹50,000 to ₹5 lakh.

So, as things stand now, the standard Covid plan — Corona Kavach — is the best choice among plans in the market for protection against Covid-19. All those without health insurance or pinning hopes on a corporate health cover or having an old health plan with a lot of sub-limits could go for this policy.

While the features under Corona Kavach are standardised, the choice is not easy. The price of the most expensive policy is 10 times that of the cheapest policy. Here, we give you an idea on the premium of different insurers and how to go about choosing what is most suitable for you.

Cost of the cover

The average claim amount for Covid-19 treatment at a private hospital for a minimum 10-day stay comes to anywhere between ₹1.5 lakh and ₹2 lakh, says Amit Chhabra, Health Business Head, Policybazaar.com. Under Corona Kavach, of all the insurers that we checked, the company that offers the cheapest cover for youngsters is Future Generali. The premium for a 9.5-month policy for a 35-year-old for SI of ₹2 lakh is ₹480. With New India Assurance, Bajaj Allianz General, Star Health and ICICI Lombard, the premium is ₹800-1,100. IFFCO Tokio and Max Bupa offer expensive covers; their premium is ₹1,600-1,800. Go Digit’s premium is most expensive — ₹6,186.

The variation in premiums is because of the difference in underwriting assumptions, says an industry insider. While some insurers take a chance and are pricing premium aggressively, some don’t want to burn their fingers. It can be seen that the early starters in Covid-19 protection policies — Go Digit General and Star Health — don’t have a very aggressive premium.

Our take

When deciding on which insurer to go for, you need to account for the ease in buying the product. Currently, not all the insurers offer online buying option in Corona Kavach. From what we checked, it is offered only by Max Bupa, IFFCO Tokio and New India Assurance besides Go Digit.

In Max Bupa, one needs to watch out for the conditions. The web site says the policy will not be issued if one is currently residing or resided with a corona-positive patient over the last 21 days and/or had attended an event along with corona-positive patients, or interacted with a corona-positive patient, say a driver, cook or delivery boy over the last 21 days.

While this is a condition that is prudent for an insurer to have in the policy and is allowed by IRDAI, not every insurer has it explicitly stated on the web site or in the proposal form. In IFFCO Tokio, those with any pre-existing disease are not allowed to make an online purchase. In New India, the website mentions that a loading of 30 per cent on premium is applicable for persons with any of the co-morbidities (including respiratory diseases, cancer, heart diseases, hypertension and diabetes) and will not be issued policy online.

It has to be noted that those of you with high risk of being affected by Covid-19 due to co-morbidity or higher age may see insurers asking for a high premium or altogether refusing you the policy. Mulling over the proposal forms of insurers offering the policy offline, we see that most of them ask about pre-existing illnesses and some also about Covid symptoms. So, have a plan B for protection if you are refused the cover. Elderly people over 65 years and with serious health conditions who are refused insurance can consider getting themselves included in group covers of their children’s employer.

Family floater

One other point we wish to highlight here is to take a family floater under Corona Kavach. Given that the maximum cover under Corona Kavach is only ₹5 lakh, it may not suffice if more than one person in the family is infected. We suggest adding Corona Rakshak — the benefit policy that offers SI of ₹2.5 lakh, for at least you and your spouse (family floater is not available in Corona Rakshak). This will be of big help when you can’t get cashless hospitalisation.

The premium for a 35-year-old for a ₹2.5-lakh cover under Corona Rakshak from Future Generali is ₹512 for 9.5 months. If possible, consider buying a regular health cover too if you don’t have one already. Health risks due to lifestyle changes are only increasing. If you are constrained on cost and can’t spend much on insurance, you can consider Arogya Sanjeevani, a plain vanilla hospitalisation plan. It comes with sub-limits and co-payment but premium is low and can be a bare-minimum essential cover.

COMMENT NOW