The Insurance Regulatory and Development Authority (Irdai) on Tuesday allowed all general, standalone health and life insurers to offer policyholders the option to renew, migrate and port covid-19-specific standard health products—Corona Rakshak and Corona Kavach.
The regulator in June 2020 had allowed insurance companies to offer standard benefit-based and standard indemnity covid-19 health policies.
The fixed-benefit policy called Corona Rakshak Policy entails a lump sum benefit equal to 100% of the sum insured if the policyholder tests positive for covid-19 and requires hospitalization for a minimum period of 72 hours. On payment of 100% of sum insured the policy shall be terminated.
The indemnity policy called Corona Kavach Policy has a base cover with a cap on the sum insured of up to ₹5 lakh. The minimum sum insured was ₹50,000 and policyholders can opt for a cover in multiples of ₹50,000, up to ₹5 lakh.
Both these policies have a tenure of 3.5 months, 6.5 months or 9.5 months.
Welcome the Irdai’s move, Gurdeep Singh Batra, head-retail underwriting, Bajaj Allianz General Insurance, said: “The covid-19 vaccine is yet to come out and the purpose of these policies is to mainly cover the treatment costs against immediate health risks that people face due to the pandemic. Since its launch, the covid-19 specific health policies have gained really good traction mainly due it’s short term coverage been looked at immediately.”
While releasing the guidelines in June, Irdai had specified that lifelong renewability, migration and portability were not applicable to these products. It has now modified these guidelines.
The policies can now be extended for further terms of 3.5 months, 6.5 months or 9.5 months, with maximum renewal allowed till 31 March 2021. According to the regulator, the renewal can only be done only before the expiry of the existing policy contract, and if the policy is renewed, an additional waiting period of 15 days will not be imposed.
Insurers have also been allowed to change sum insured by the policyholder. For any increase in the sum insured, the waiting period shall start afresh only for the enhanced portion of the sum insured.
For migration of Corona Kavach (individual policies), insurers have the choice to offer migration to any other indemnity-based health insurance product offered by them.
For group Corona Kavach policies, insurers can offer migration to any other individual indemnity-based policy at the point of exit of the policyholder from the group policy or the cessation of coverage.
On portability, Irdai said that general and health insurers can port Corona Kavach (individual) policy from one insurer to another. The accrued gains of waiting period served in the existing Corona Kavach policy shall be protected in respect of coverage of Covid-19, by the porting-in insurer.
For Corona Kavach policy (group or individual), migration or portability to any other comprehensive health insurance policy has also been allowed, till the end of the policy period.
According to experts, it is better to go for a policy that covers all kinds of hospitalization as it could come up for various reasons and not just covid-19.
“We would prefer that such insuring population eventually opts for comprehensive health insurance policies, after realizing the important role that health insurance plays in times of such exigencies and future complications,” said Batra.
