The Right Cover for the Wrong Time

One of the most succinct proverbs on the significance of time and life has been the myth of Noah from the Bible. “Always plan ahead. It wasn’t raining when Noah built the Ark.” The adage has its own inherent wit but it became the wisdom in the reign of the pandemic. Health cover could never be so precious unless Covid had uncovered its true value to the world.

As people rush for cover, it becomes crucial for them to find out which insurance product would be the best fit for them and, more than knowing what it covers, one needs to know what it doesn’t.  “Covid has drawn every individual to realise the uncertainty of life in the hardest way,” says Bikash Choudhary, the appointed actuary and Chief Risk Officer at Future Generali India Life Insurance.

The number of health insurance policies bought in the last one year has gone up since the outbreak of the disease and consequently increasing the cumulative revenue cumulative revenue for the health cover sector, comprising both private and public sector insurers.

“During the pandemic, insurers have been continuously reviewing their existing offerings and have kept updating them as per regulatory guidelines to remain relevant among consumers,” says Parag Raja, MD and CEO, Bharti AXA Life Insurance. Sector watchdog Insurance Regulatory and Development Authority of India (Irdai) has directed the insurers to provide a standard offering for Covid insurance mandatorily.

After the first outbreak of the Covid-19 pandemic last year, the Indian insurance industry came out with two types of policies to secure consumers against the cost of treatment of the viral infection.

“While Corona Kavach reimburses you for the actual hospitalisation expenses up to a maximum of the total sum insured, Corona Rakshak works as a fixed benefit plan and pays the policyholder the entire sum insured upon hospitalisation due to Covid-19 infection for a minimum of 72 hours,” says Amit Chhabra, Head of Health Insurance wing at Policybazaar.com.

“Although Corona Rakshak’s 72-hour hospitalisation norm is a major limitation as home treatment is the preferred choice for most asymptomatic and mildly symptomatic patients who can quarantine themselves while being treated,” he notes.

The insurers have devised a Covid standard benefit-based health policy on an individual basis but there is no family floater option available yet. A family floater health insurance policy allows you to cover your entire family under the umbrella of one health insurance policy and with the payment of a single annual premium amount. All benefit-based policies pay out the entire sum insured to the policyholders if they are diagnosed with the ailments covered under the policies.

The minimum sum insured shall be Rs 50,000 and the maximum limit is up to Rs 2.5 lakh. For a 40-year-old individual buying a Rs 2.5-lakh Corona Kavach, the premium for Star Health and Allied Insurance will be 3,846 for a tenure of 3.5 months, while the premium for 9.5 months will be 5,192. The same plan for Future Generali Insurance will cost Rs 510 for 3.5 months, while the price for 9.5 months will be Rs 1,079. Universal Sompo General Insurance charges Rs 577 for 3.5 months and Rs 1,635 for 9.5 months.

The cost of premium, however, may vary and needs to be cross-checked with the insurance company you subscribe or the insurance advisor you refer to.

For Corona Kavach, one of the most important benefits is that the plan will pay for the cost of personal protective equipment (PPEs) and other hygiene-related consumables like gloves and masks, which form a major chunk of the hospital bills. Additionally, there won’t be any sub-limits on room rent as capping of room rent usually results in increased out-of-pocket expenditure.

The policy tenure will be 3.5 months, 6.5 months or 9.5 months, including the waiting period. The Corona Kavach policy will be available on both – an individual and a family-floater basis.

The minimum sum insured under the Corona Kavach policy will be Rs 50,000 and the maximum sum insured will be Rs 5 lakh in the multiples of Rs 50,000. For the benefit of the customer, the policy will even cover any co-morbid condition triggered by Covid-19 during the period of hospitalisation. There is a waiting period of 15 days before the policy cover comes into effect.

These are the bare-bones details of the insurance that you can buy to secure yourself and your family against Corona. But how does one choose the proper plan to go in for?

One can opt for such standard products by understanding the coverage, claim process, consumable expenses, co-payment options, add-on covers, policy tenure, premium costs and the sum insured and evaluate which plan fits best with her medical needs. “For someone who has an existing health insurance plan, he or she will get the coverage for the treatment for coronavirus,” says Rakesh Goyal, Director of Probus Insurance. “People who have contracted the virus and wish to opt for a plan, may have some waiting period,” he adds.

Buying a policy is not the end of the road. The most important part of the insurance journey is settlement of your claim. Irdai has issued a diktat to all insurers to speed up the process of claim settlement. “The regulator has also asked the claim committee to thoroughly access the claim before sending any repudiation notice,” mentions Amjad Khan, Director and Business Head at the Employee Benefit Practice, at Anand Rathi Insurance Brokers Ltd.

While choosing your insurer, you should check if the company has a good claims settlement process and a large network of hospitals that provide cashless facilities. “Also, one’s preferred hospitals in the vicinity should preferably be within the network,” says Ajay Shah, Director and Head of Retail Sales at Care Health Insurance, which was earlier known as Religare Health Insurance.

The ideal way is go by the advice of a licensed agent or any Irdai-certified intermediary if you are not sure about which product or company to go with.

The last step in the process of selecting the right company and the right cover is checking out the premium. You must consider the premiums being offered against a cover that suits you and also the provision for easy instalments. “But do not let a slightly higher premium stop you from purchasing a better policy. A wise investment in health insurance now can protect you and your family’s health in the future by ensuring access to quality medical treatment and financial support at the time of need,” says Anand Roy, Managing Director, Star Health and Allied Insurance.

Experts also point out that you should look beyond the pandemic for your insurance needs and broad-base your insurance planning. “I firmly believe that people should opt for a comprehensive health indemnity insurance policy,” says TA Ramalingam, Chief Technical Officer, Bajaj Allianz General Insurance. “It would not only cover you for Covid-19, but also other ailments, which people are susceptible to.”

In case of a Covid-specific policy, one is eligible for claim only if she contracts Covid-19. After contracting the disease, she may develop other ailments, which may not be covered in Covid-specific policy. “It’s important for people to also understand that Covid-19 may not be the last unknown virus that has affected the world. Other unknown viruses may hit us and it’s important to be prepared for such situations with this important risk mitigation tool,” says Ramalingam.

The uncertainty unleashed by the pandemic makes us feel that in addition to a health indemnity policy, one should also consider a super top-up. A super top-up comes to your rescue when the sum insured of the base policy gets exhausted. The cost escalation is not too high for these policies and they play a crucial role when medical bills are shooting through the roof.

“We should also keep in mind that Covid is contagious and at times affects multiple members of the family and hence, having a good cushion of cover of at least Rs 10 lakh is recommended,” says Shah.

While thinking of health insurance, it is imperative that one must not forget to cover the seniors in the family – be it parents or in-laws or any other dependent elderly relative. Policies that provide comprehensive coverage are better than one policy that covers only Covid-related ailments. In case of individuals, a sum insured of Rs 10 lakh is preferred and, in case of a family floater, the ideal sum insured should be Rs 15 lakh. It is, however, better to have separate policies for parents and other senior citizens.  

In case the policyholder succumbs to Covid-19 infections, then the nominee or the beneficiary gets the sum assured as death benefit. For new policy buyers, it is quite obvious to assume that the coronavirus might have an impact on the policy acceptance as well as the premium rates.

Apart from Covid-19, one shouldn’t ignore the medical inflation, rising treatment costs, and any medical emergencies which may crop in future if a family member falls sick. “Hence, we advise consumers to choose a regular indemnity-based health plan which offers an extensive and comprehensive coverage for ailments over and above Covid-19 up to the total sum insured,” says Mayank Bathwal, CEO at Aditya Birla Health Insurance.

The health policy should cover lifestyle diseases, provide protection for your family, counter inadequate insurance covers, help manage medical inflation, motivate you to lead a healthy lifestyle, and safeguard your savings.

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Your Checklist for Buying Cover 

Choosing the right life insurance policy and following some basic rules are very important to safeguard the interest of your loved ones in these uncertain times. Rishi Mathur, Chief Digital and Strategy Officer, Canara HSBC Oriental Bank of Commerce Life Insurance lists down few rules that one must bear in mind while buying a cover. 

1. Check if the policy offers additional coverage options like terminal illness coverage or critical illness benefits. Basis your requirement, you can add this coverage at the time of purchasing the policy.

2. Ensure that if the policy requires you to answer the Covid-19 questionnaire or additional health queries, you fill it up correctly and truthfully.

3. Ensure that you disclose all your current health status and conditions (if any) accurately in the proposal form. If a medical test is required, do not postpone it but go ahead, sticking to the social distancing norms and mask usage rules.

4. If you are purchasing a policy online, you may be required to have a tele-medical interaction in some cases. Answer correctly and honestly.

5. Use Digilocker or EIA option if purchasing a policy to secure your policy documents and provide your nominee a way to access your account if you are not there. If you choose a physical policy document, ensure your family is aware of the policy, what are the benefits, who to reach at the insurer, and what are the key documents required to claim.

The writer is a financial journalist