The IRDAI has directed all general and Health Insurance companies to offer a standard individual benefit-based Covid-19 Health Insurance product on or before June 30, 2020. Should you go for it? Let’s find out.
The IRDAI has directed all general and Health Insurance companies to mandatorily offer a standard individual benefit-based COVID-19 Health Insurance product on or before June 30, 2020. Should you opt for it? Read through this article and then take a call.
What Is It?
This is a standard individual benefit-based insurance policy for individuals and families that will provide coverage of up to Rs. 5 lakh for hospitalisation expenses owing to COVID-19 infection.
The policy will be named as COVID-19 Standard Individual Benefit-Based Health Policy succeeded by the name of the insurance company.
Here are the five key features of the standard COVID-19 policy:
- The insurance policy will take care of the basic COVID-19-related health needs of the insured
- It will be a standard product with common policy wordings across the industry
- It will facilitate seamless portability among insurers
- Even senior citizens up to the age of 65 years can avail this policy
- The policy will be issued for one year and can be renewed every year
Additional Reading: COVID-19 Treatment: How Much Health Cover Would You Need?
The sum insured starts from Rs. 50,000 and goes up to Rs. 5 lakh, and will be offered in multiples of Rs. 50,000.
The policy can be availed by anyone between the age of 18 years and 65 years. An individual above 65 years can obtain a policy for his/her family, without covering self.
The policy will be offered on a family-floater basis and will include dependent children from the age of three months to 25 years.
Category Of Cover
The base cover and the add-on cover shall be made available on the basis of benefit.
Modes Of Premium Payment
All the modes (yearly, half-yearly, quarterly, monthly) will be allowed for the standard product. ECS (auto-debit facility) is also allowed.
For yearly mode of payment, a fixed period of 30 days will be allowed as grace period. For all other modes of payment, a fixed period of 15 days will be allowed as a grace period.
Additional Reading: 4 Money Lessons From The COVID-19 Crisis
The insured will be allowed at least 15 days from the date of receipt of the policy to review the terms and conditions of the policy and to cancel the policy if not acceptable.
Waiting Period/Pre-Existing Disease
The policy comes with a waiting period of 15 days. Pre-existing diseases declared in the proposal form and accepted for coverage by the company shall be covered after a waiting period of 48 months.
Both the base cover and add-on cover is available with the policy, but on a defined benefit basis. Here’s how the add-on will work:
If the insured is quarantined due to suspected infection of COVID-19, then 50% of the base sum insured will be paid to the insured. The payout that the insurer will make on account of the base cover and add-on cover will not exceed 100% of the sum insured during a policy period.
If the policyholder is diagnosed with COVID-19 after settlement of benefits on account of quarantine cover, the policyholder is entitled to the balance amount of benefit. It must be noted that the quarantine cover is merely partial acceleration of the base cover benefit and not an increase in the sum insured.
The IRDAI has instructed insurers to clearly specify the premium that policyholders need to pay towards the add-on so that they can pick, choose and pay based on their needs.
Additional Reading: Arogya Sanjeevani Health Insurance Explained
How Does It Work?
As per IRDAI guidelines, on positive diagnosis of COVID-19 that results in hospitalisation, the insurer will have to pay a lump-sum benefit equal to 100% of the sum assured to the policyholder. The diagnosis has to be confirmed by authorised centres as declared by the Ministry of Health and Family Welfare, Government of India.
In case the policyholder’s hospital bill goes higher than the sum assured, the additional cost will have to be borne entirely by them.
Will The Benefit-Based Policy Help You?
The benefit-based COVID-19 Health Insurance policy is useful for individuals who do not already have a regular and comprehensive Health Insurance policy and are looking to protect themselves amid the COVID-19 outbreak. Otherwise, if you do have a sufficient and comprehensive cover that will in any case cover COVID-19 treatment, you may not need this standard benefit policy.
The standard benefit policy is different from the Arogya Sanjeevani policy in that the latter is applicable for all illnesses, whereas the standard benefit one applies only to COVID-19. Given this, if you can afford a regular Health Insurance, it’s advisable to go for that than buying a disease-specific plan as it will offer adequate coverage against all possible illnesses, not just limited to COVID-19.
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