Know Differences Between Corona Kavach Policy And Corona Rakshak Policy

By | August 4, 2020

The IRDAI has mandated general health insurers to offer short-term health plans like Corona Rakshak and Corona Kavach to cover hospitalisation expenses arising out of treatment for COVID-19. Here are some important differences between them that you must be aware of. 

Insurance Online Vs. Offline

Corona Rakshak and Corona Kavach are two short-term health plans that general Health Insurance companies have started to offer under directions from IRDAI that offer cover for COVID-19-related treatment in the hospital. While these specific plans are tailor-made only for COVID-19 related hospital expenses, there are two obvious benefits that come with these plans:

  • The no-claim bonus on your existing Health Insurance does not get impacted.
  • You don’t have to continue paying premium lifelong as these are only short-term plans.

The most important difference between these two insurance plans is that while Corona Kavach policy is an indemnity-based plan in that only the insurer will only reimburse your hospital bill, the Corona Rakshak policy on the other hand, is a benefit-based plan where the insurer will pay 100% of the sum assured to the policyholder.

Let’s take a look at the other differences between these two plans:

1. Who Offers Them

Corona Kavach Policy or the COVID Standard Health Policy will be mandatorily offered by all general and Health Insurance companies. Life Insurance companies cannot offer this policy. On the other hand, one can approach any insurer to buy the Corona Rakshak Policy.

2. Availability

The IRDAI has mandated that the Corona Kavach policy be offered by all insurers from July 10. The IRDAI has asked insurers to launch the Standard Benefit-Based Health Policy or Corona Rakshak policy before July 10, these policies are yet to be launched.

3. Cover: Minimum And Maximum

The minimum sum insured for Corona Kavach Policy is Rs. 50,000 and the maximum is Rs. 5 lakh. For the Corona Rakshak Policy, the minimum sum insured is Rs. 50,000 and the maximum is Rs. 2.5 lakh.

Additional Reading: How Good Is A Standard Individual Benefit-Based Coronavirus Health Insurance Policy?

4. Hospitalisation

In the Corona Kavach policy, the insurer will pay the base coverage or the sum insured only when there is a hospitalisation of a minimum period of 24 hours. The insurer will pay hospital expenses up to the sum insured will irrespective of the days of stay in the hospital. However, in the case of Corona Rakshak Policy, hospitalisation for a minimum continuous period of 72 hours is required for the sum insured pay out.

5. Nature Of Policy

The Corona Kavach Policy has one basic mandatory cover and one optional cover. The policyholder can pay the premium towards the optional cover separately and can choose and pay as per their need. The optional cover will be available to customers on a benefit basis whereas the mandatory cover will be offered on an indemnity basis.

Wondering what’s the difference between an indemnity-based cover and a benefit-based cover? In an indemnity-based cover, the insurer makes a payout to the policyholder based on medical expenses incurred for treatment of COVID. In a benefit-based plan like Corona Rakshak though, the insurer will pay fixed compensation upon the patient being diagnosed with COVID and being hospitalised for 72 hours, irrespective of the medical expenses that the policyholder incurs.

6. Type Of Policy

Insurers are offering Corona Kavach both on an individual as well as family floater basis. Corona Rakshak policy on the other hand, is offered on an individual basis only and doesn’t have the family floater option.

Additional Reading: COVID-19 Treatment: How Much Health Cover Would You Need?

7. Optional Benefit

The Corona Kavach Policy also offers an option for policyholders to add a ‘Hospital Daily Cash’ cover. Under this, the insurer will pay 0.5 per cent of the sum insured per day for every 24 hours of continuous hospitalisation for treatment of COVID, following an admissible hospitalisation claim under this policy. The insurer will pay this benefit for up to a maximum of 15 days during a policy period. However, this feature is missing from the Corona Rakshak policy as it is entirely a benefit-based plan.

One important thing to note about both these plans though is that both do not cover co-morbidity arising out of COVID-19 treatment. This is why it’s recommended that you opt for a higher cover and a longer term for the plan. However, these plans shouldn’t be considered as a substitute for a regular Health Insurance plan. Remember that these plans will only provide specific cover for COVID-related treatment at an affordable price but cannot cover for treatments relating to other ailments.

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