Tag: corona rakshak

A refresher course on Corona Rakshak, Kavach policies

Personal Finance

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Two colleagues find themselves discussing about the various insurance options that are available in the market to cover for Covid-19 specific risks.

Raj: Hey, I just read today that IRDAI is extending the availability of two Covid-specific policies, Corona Kavach and Corona Rakshak till March 31, 2022.

Rohit: Okay. I’m not sure about the details of the two policies but I remember that they were marketed quiet aggressively in our society last year.

Raj: Both are standard policies with very little difference in benefits across insurers. While Kavach is an indemnity policy that covers hospitalization charges upon admission for at least 24 hours, Rakshak is a benefit policy where the insured gets 100 per cent of the sum insured on diagnosis and the policy terminates thereafter.

Rohit: So, Corona Rakshak is like a one-time payment on diagnosis, while Kavach is like a regular health policy where you expenses are covered up to the limit of the sum insured. But what are the incremental advantages of Corona Kavach over a normal health policy which also covers hospitalisation ?

Raj: The basic premise when these policies were introduced last year was to provide an affordable and quick cover to people without sufficient health coverage in the midst of a raging pandemic. But if one has a comprehensive health insurance which covers out-patient, home care and other charges, Corona Kavach may not be needed. Corona Rakshak can be considered for additional cover or if out-patient charges are not covered in your existing health policy.

Rohit: Yes that is a marked advantage. My health policy requires hospitalisation to kick in.

Raj: Also, since the two are standardized products, one need not put extra effort in reading the fine print which is a must before buying insurance policies in general. With Corona Kavach, hospitalisation charges even include charges for most consumables like PPE kit and gloves in addition to room rent, ICU, medical practitioner fees, operation theatres and even ambulance service up to ₹2,000.

What’s more, even pre-hospitalisation medical charges up to 15 days and post-hospitalisation medical charges for 30 days are also covered. The claim amount will be determined by the sum insured. The minimum sum insured available under both the policies is ₹50,000. The maximum can go up to ₹5,00,000 for Corona Kavach and ₹2,50,000 for Corona Rakshak.

Rohit: They seem to be fairly comprehensive in their coverage.

Raj: Apart from covering incurred expenses, optional covers in Corona Kavach provide daily cash of 0.5 per cent of sum insured for a period of 15 days to cover for daily expenses.

Rohit: Is there any waiting period like with other health policies?

Raj: Yes there is a 15-day waiting period under both the policies. The policies can be availed for a period of 105 days (3.5 months), 195 days (6.5 months) and 285 days (9.5 months) and can be renewed to ensure the benefits continue. People between the ages of 18 to 66 can buy these two products.

Rohit: Well, even with an increasing rate of vaccination any cover for Covid does offer peace of mind against any residual risk of infection.

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Insurers seek re-pricing of Corona Kavach, Corona Rakshak policies

Banking & Finance

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Worried by rising claims and low premium, insurers have approached the insurance regulator IRDAI for a re-pricing of the Corona Kavach and Corona Rakshak policies.

Insurers point out that these low ticket policies were expected to be for a short duration, but with the pandemic continuing, they are turning out to be expensive propositions for them and hitting their balance sheets.

 

“The industry as a whole has asked for repricing of Corona Kavach and Corona Rakshak. We priced it around June 2020, and the actual peak has been five to 10 times of the expectation. These products are a guaranteed loss of money,” said a source privy to the development.

Sources said general insurers discussed the issue with IRDAI recently and shared data on losses.

 

“Insurers too have to report to their shareholders. These schemes were supposed to be for a short duration and no one had thought that Covid cases and claims would rise to such an extent,” noted another insurer.

Covid-specific covers

The Corona Kavach and Corona Rakshak policies were launched last year based on IRDAI guidelines by all insurers to provide Covid-specific cover to customers.

 

Corona Kavach is a family health insurance policy for Covid-19 with sum insured between ₹50,000 and ₹5 lakh available with a term of three and a half months, six and half months and nine and half months. Premiums are as low as ₹150 in some cases.

Corona Rakshak is a defined benefit policy with a sum insured between ₹50,000 and ₹2.5 lakh.

 

Comprehensive cover

Many insurers are now advising customers to move to Aarogya Sanjeevani, which is the standard health policy, which would provide more comprehensive health cover. Some insurers said that customers, too are preferring to shift to a full-fledged health cover.

 

“One of the objectives, when these policies were launched, was that they would educate customers about the benefits of health insurance and they would eventually migrate to full fledged covers,” noted an insurer.

A recent note by ICICI Securities said that industry-wide Covid claims till May 14, 2021 was 1.5 million in terms of number and $3.1 billion in value compared to 11.1 million in numbers and $2.1 billion in value in 2020-21.

 

“Our channel checks indicate that industry losses are higher on Covid-specific polices (Corona Kavach and Corona Rakshak),” it said.

The general insurance industry has over ₹24,000 crore of Covid related claims to date from the beginning of the pandemic.

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How you can insure yourself from Covid

Personal Finance

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With the second wave of Covid raging across the country, many are looking to buy a health cover or enhance the same. According to data from Policybazaar.com, 90 per cent of their customers who have an existing health cover of about ₹5 lakh are porting to a higher sum insured of ₹10-15 lakh. While you must make it a point to follow all Covid protocols to avoid getting infected, here’s how you can financially shield yourself against Covid if you unfortunately fall sick.

 

Date extended for Covid-plans

In addition to taking toll on your health, Covid-19 infection can dent your savings as well.

Keeping this in mind, the insurance regulator, IRDAI has recently extended the validity for sale and renewal of short-term Covid specific health insurance policies – Corona Kavach and Corona Rakshak – till September 30, 2021. This was previously available up to March 31, 2021.

The insurance regulator in July 2020 had mandated that all general and standalone health insurers offer Corona Kavach health policy.

This (Corona Kavach) is an indemnity policy which pays for the hospitalisation of the insured affected due to Covid-19, provided he/she is hospitalised for a minimum period of 24 hours. It also offers cashless facility to its policyholders, provided hospitalisation is from the insurer’s list of network hospitals.

Hospitalisation cover includes expenses such as room rent, boarding, nursing, ICU, ambulance service up to ₹2,000, medical practitioner and consultant fees, operation theatres, PPE kit, gloves, etc.

It covers for home care treatment expenses as well, up to the sum insured (SI) for a maximum period of 14 days. All general and standalone health insurers offer this policy.

There are complaints that some hospitals are not granting cashless facility for treatment of Covid-19 despite policyholders being entitled for the same. The insurance regulator has recently clarified that wherever insurers have an arrangement with the hospitals for providing cashless facility, such hospitals are obligated to provide cashless service for all treatments including treatment for Covid-19. In the event of denial, policyholders can file a complaint with the insurer concerned.

Another plan introduced by IRDAI, but not mandatory to be offered by all insurers, is Corona Rakshak. It is a benefit policy, where the insurer will pay 100 per cent SI upon positive diagnosis and the policy shall terminate thereafter.

As both are standard policies, the coverages and exclusions across insurers will be the same, including the policy name. Both policies can be availed for a period of 105 days (3.5 months), 195 days (6.5 months) and 285 days (9.5 months) and can be renewed to ensure the benefit of the policy continues.

The minimum SI under both policies is ₹50,000; the maximum SI offered under Corona Kavach is ₹5 lakh and for Corona Rakshak ₹2.5 lakh. The minimum and maximum age of entry is 18 and 65 years respectively, and only single premium payment mode is allowed under both policies.

Regular health policies cover hospitalisation due to Corona virus among other diseases/accidents. At the beginning of the outbreak of the pandemic, there were problems over providing cover for associated costs such as personal protection equipment (PPE) kits.

These expenses formed part of consumables which were not usually covered by most insurers. Those who did cover, applied ‘proportionate deduction’ clause based on the type of hospital room availed.

In June last year, to reduce the burden of the policyholders and to standardise the claim settlement, IRDAI, ordered that medical expenses including cost of pharmacy, consumables, implants, medical devices and diagnostics to be covered as part of health policies without being subject to the ‘proportionate deduction’ clause. Covid-related expenses in the above-mentioned heads such as PPE kits will reap the benefit of this move.

Further, if you have a health policy which covers for out-patient (OPD) medical expenses – known as comprehensive cover – you can reimburse your Covid-19 related home treatment medical expenses too, if you are under home quarantine.

Making the choice

Your financial burden is likely to be reduced whether you have Covid-19 specific health covers or a comprehensive health cover. However, if you plan to sign up for one now, do note that all new health insurance policies come with a waiting period of 15 days, only after which your cover will kick in.

Covid specific plans as well as regular health cover have certain exclusions. Any unproven treatment will not be covered.

Coverage under both policies cease if the insured travels (outside the country) to a destination where India restricts travel to or the foreign country restricts entry of travellers from India.

So, if you are looking to buy a plan to protect against Covid, you can skip Corona Kavach if you have a regular health plan covering OPD expenses. Corona Rakshak can be useful if your regular plan does not cover OPD or if you are looking for additional cover. Since Rakshak is a benefit policy, this can come in handy to cover expenses for tests, scans, medicines, etc. for those who are home quarantined.

(This is a free article from the BusinessLine premium Portfolio segment. For more such content, please subscribe to The Hindu BusinessLine online.)

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What does standard insurance policy mean

Personal Finance

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Two neighbours’ daily routine of watering plants leads to an interesting conversation.

Sindu: Each plant is unique and has its own requirements in terms of sunlight, water and nutrients.

Bindu: Yes. There is no standard procedure to follow when it comes to plant care.

Sindu: I agree. I think that’s why gardening is an art. But in other matters, standardisation might work for the better, like in insurance.

Bindu: Yes, you are right. It is so difficult to understand every insurance product and its features, what it covers, what it doesn’t, and finally make a choice.

Sindu: That’s true. In recent months, the insurance regulator IRDAI has introduced guidelines for standard insurance policies to be launched by insurance companies. These products will help overcome the challenge you just mentioned.

Bindu: By standard policies you mean those where the coverage is the same across insurers, right?

Sindu: Yes. They are same not only in terms of coverage, but also other features, including riders, policy distribution methods and policy names.

Bindu: Ok. What are the standard products that we have?

Sindu: So far, the regulator has introduced Arogya Sanjeevani (standard health policy), Saral Jeevan Bima (standard term insurance), Saral Pension (annuity product) and other products such as personal accident cover and home insurance. IRDAI has even laid down the guidelines for standard Covid-19 policies Corona Kavach and Corona Rakshak. Standard cyber insurance cover too is likely to be launched.

Bindu: Okay. If it is the same features and coverage across insurers, it doesn’t matter which insurer we choose, does it?

Sindu: May be not! While IRDAI has laid down the guidelines for coverageand features, the premiumto be charged for the policy is left to the discretion of the insurer. Hence, you can select an insurer based on the premium charged.

Bindu: Oh! I didn’t know that the premium could be different with each insurer.

Sindu: There is a stark difference in premium among the insurers for the same policy. This can be due to the difference in factors such as the on-boarding process, medical check-up, network hospitals and claim settlement processes followed by each insurer.

Bindu: But whatever said, these standard policies come in handy for those who don’t have any basic policy and for those who don’t have any clue on insurance policies or selection.

Sindu: That is so true. Basic insurance is better than nothing at all.

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