Never let a good crisis go waste said Winston Churchill. So, use COVID-19 to strategise your health insurance.

Your hospitalisation policy covers COVID-19 treatment but may fall short because non-medical expenses are not covered and the COVID-19 treatment protocol is heavy on just such expenses such as isolation, personal protective equipment, sanitisation costs and so on.

In late June, the Insurance Regulatory and Development Authority of India (IRDAI) designed two standardised COVID-19-specific covers and directed all insurers to introduce them by July 10. They are Corona Kavach, (CK) an indemnity policy (that meets your expenses) and Corona Rakshak (CR), a benefit policy (that pays a fixed lumpsum on COVID-19 diagnosis).

CK can be offered only by a general or an health insurance firm while CR can be offered by life insurers also. Being short-term policies, neither is eligible for life-long renewability, migration or portability. Let us look at what they cover, their necessity and utility.

Corona Kavach

CK comes with sum assured (SA) options of ₹50,000 to ₹5 lakh in increments of ₹50,000, policy periods of 3.5, 6.5 or 9.5 months (including a maximum of 15 days’ waiting period), reimbursement of treatment costs and non-medical expenses without sub-limits, domiciliary hospitalisation, Ayush treatments without sub-limits and pre- and post-hospitalisation expenses of 15 and 30 days respectively. Cashless facility will be available in network hospitals. CK will also cover cost of treatment for any co-morbid condition or conditions, including pre-existing ones, along with COVID-19 treatment.

Persons from age 18 to 65 can be covered. Individual and family floater covers are available. In the case of family floater cover, the insured person, spouse, parents, parents-in-law and children from 1 day to 25 years of age can be covered (with the exception of financially-independent children above 18 years of age). Group covers are also available with the usual rule that the group should be pre-existing and not formed for the purpose of buying insurance. Additionally, a hospital daily cash benefit cover can be offered as an option.

Usual hospitalisation policies have zone-wise premium rates, but for CK and CR, the whole country is rated as one zone. Underwriting discretion is with the insurerincluding acceptance/ rejection of the proposal and premium rating/ loading which will be based on medical tests. Choosing the insurer depends on a few factors. If you have a good relationship with an insurer, that will be a natural choice. If not, choose one which people in your circle have good experience with and where the agent or other intermediary has a proven track record. Premium rates differ quite widely across companies making your choice difficult.

Corona Rakshak

This is a simpler policy where, if the insured is diagnosed with COVID-19 from a government-authorised diagnostic centre and is hospitalised for 72 hours, the entire SA will be paid as a fixed benefit. Only individual cover is available.

SA options range from ₹50,000 to ₹2.5 lakh in multiples of ₹50,000 and policy period options are 3.5, 6.5 and 9.5 months, including a waiting period.

To buy or not to buy

If you have a hospitalisation policy, then your only need will be meeting the non-medical expenses. From that point of view CR can be the policy to take, but it has a relatively limited cap of ₹2.5 lakh. If you don’t have a hospitalisation policy yet, CK can be a good entry point for health insurance at a time when it is a critical need.

(The writer is a business journalist specialising in insurance & corporate history)

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