Given the rate at which Covid-19 is permeating the country and considering the impact of lockdown on the economy, many people have been hit by the double whammy of disease and dearth of funds. Combine this with the low penetration of health insurance in India and it has created a gap that insurers are rushing to plug with niche health products.
Spurred by the insurance regulator to come up with Covid-specific products, several such plans have flooded the market in the past month or so from players such as Star Health & Allied Insurance, Bharti AXA Health Insurance, ICICI Lombard, Reliance General Insurance and Digit Health Care Plus. These are fixed benefit covers, which offer a lump sum on the diagnosis of the disease and end after the amount has been paid. The sum assured varies from RS 21,000 to Rs 2 lakh, annual premiums are typically low, ranging from Rs 150 to nearly Rs 3,900, and there’s a variety of benefits and exclusions for each, ranging from quarantine coverage and per day cash provision to no pre-medical check-ups or consideration of overseas travel history.
“If you already have a basic health plan, you don’t need to buy these because your existing plan will cover the treatement and hospitalisation of all diseases, including Covid-19,” says Deepak Mendiratta, Managing Director, PlanCover.com, an insurance broking company. Agrees Dr S. Prakash, MD, Star Health Insurance: “A basic indemnity plan will cover all Covidrelated treatements, so you need not go for this specific plan.”
Are these plans required at all then? If you have no insurance, be it personal or group cover, and are running low on funds, it might be a good idea to pick it up as a temporary risk cover since it will last a year and does not cost much. It may prove especially useful if you are at high risk. “Since the Covid-19 treatment is currently in government hospitals, where the medical expenses are low or nominal, it will help you cover the small amounts and incidentals,” says Prakash.
“Our cover is aimed at tier 2/3 cities and rural audience,” says Victor Choi, CEO, True Balance, which has partnered with ICICI Lombard to bring out the Covid-specific cover through its mobile app. “It is very convenient for the unbanked, illiterate and low-income population that is not insured. The plan doesn’t require hospitalisation or provision of bills to make a claim and the lump sum amount is dispersed quickly on diagnosis of the disease,”
Another advantage is that since most of these plans provide a lump sum on diagnosis, the amount can be used as per one’s discretion. However, if you were to require intensive care and isolation, most plans would help only in a limited manner. While some plans provide 50% of the sum assured for quarantine or a cap on the number of days, others stipulate the quarantine or isolation only in government or military hospitals, not in private nursing homes or at home.
“If you were taking treatment in a private hospital and required ventilator support in an ICU for 15-20 days, even a nominal cost of Rs 30,000 per day would easily escalate to around Rs 6 lakh or more,” says Mendiratta. In such a case, most of the expenses would have to be met from your own pocket. A Rs 5 lakh basic indemnity health plan would serve a much better purpose here.
For a first-time purchase of an insurance plan, a good option would be the basic Arogya Sanjeevani cover that all health insurers are mandated to provide as per the directive of the Insurance Regulatory and Development Authority of India (IRDAI). ManipalCigna Health Insurance, Bajaj Allianz General Insurance, HDFC Ergo, SBI General Insurance and Digit Health Care Plus are among the players that have already introduced these plans. All these covers, much like any other basic indemnity plan, cover Covid-19 in addition to various other diseases and illnesses.
“Our Arogya Sanjeevani coverage of Covid-19 is no different from that for any other disease and we also honour qurantine claims provided they are in an authorised hospital,” says Prasun Sikdar, MD and CEO, ManipalCigna Health Insurance. The sum assured ranges from Rs 1-5 lakh and the premium varies for individual and family floater plans. “The niche health products cannot be a substitute for a basic health plan. If the sum assured of your plan is not enough, say, only Rs 1-2 lakh, only then should you opt for these at present,” adds Sikdar.
In the final analysis, purchase the fixed benefit plans only if you have no or very little insurance, are at a high risk of catching the disease, or have no access to funds at the moment.