IRDAI’s Initiative to Fight COVID-19: Corona Kavach Policy & Corona Rakshak Policy

IRDAI’s Initiative to Fight COVID-19: Corona Kavach Policy & Corona Rakshak Policy

Executive Summary

• On 26th June, 2020, IRDAI launched Covid-19 Standard Benefit-Based Policy and Covid-19 Standard Health Policy to provide health insurance cover against COVID-19.
• The Covid-19 Standard Health Policy to be called as “Corona Kavach Policy” and Covid-19 Standard Benefit-Based Policy to be called as “Corona Rakshak Policy”.
• Insurers have been encouraged to offer these policies by 10th July, 2020. However, Covid-19 Standard Health Policy (Corona Kavach Policy) shall compulsorily be offered by 10th July, 2020.
• For Covid-19 Standard Benefit-Based Policy, the sum limit shall be from Rs 50,000/- upto Rs 2,50,000/- and for Covid-19 Standard Health Policy the sum limit shall be from Rs 50,000/- upto 5,00,000/-
• Both the policies to be offered with a policy term of 3.5 months, 6.5 months, and 9.5 months and only single premium payment mode shall be allowed.
• “Corona Kavach Policy” provides for 2 covers- Base Cover (Mandatory for all Insurers to offer) and Optional Cover. Base Cover includes insurance of Covid hospitalization expenses & home treatment expenses, Ayush treatment, pre-hospitalization expenses and post-hospitalization expenses. Optional Cover comes with an optional hospital daily cash cover in which the insurer will pay up to 0.5% of the sum insured for every 24 hours of hospitalization and the benefit shall be payable upto 15 days.
• “Corona Rakshak Policy” provides a lump sum benefit equal to 100% of the sum insured if the policyholder tests positive for covid-19 and requires hospitalization for a minimum period of 72 hours. The policy terminates, once the 100% insured sum is utilized.

Introduction

The Insurance Regulatory Development Authority of India (IRDAI) on 26th June, 2020, published the guidelines for the Covid-19 Standard Benefit-Based Policy and Covid-19 Standard Health Policy. All life, general and standalone health insurance companies have been encouraged to offer the benefit-based policy, while all health and general insurance companies are mandated to offer the indemnity policy.

The Covid-19 Standard Health Policy shall be called as “Corona Kavach Policy” and Covid-19 Standard Benefit-Based Policy to be “Corona Rakshak Policy”.

Applicability

The “Corona Kavach Policy” is applicable to all general and health insurers except ECGC & AIC. Every General and Standalone Health Insurer, who has been issued a Certificate of Registration to transact General and/or Health Insurance Business, shall mandatorily offer this product. General and Health Insurers shall compulsorily start this policy on or before 10th July, 2020.

The “Corona Rakshak Policy” shall be applicable to all Insurers (General, Health and Life). Such Insurers (General, Health and Life) transacting Health Insurance business may endeavor offering this policy preferably by 10th July, 2020.

The minimum entry age for both the policies shall be 18 years and the maximum is 65. Dependent children shall be covered from the age of three months to 25 years.

Insurance Sum Limit for Policies & Its Premium

Corona Kavach Policy:

The Corona Kavach Policy shall be followed by the insurance company’s name. The minimum sum insured under Covid Standard Health Policy shall be Rs 50,000/- and the maximum limit shall be Rs 5,00,000/- (in the multiples of fifty thousand). Insurers have to offer Base Cover and Optional Cover, wherein the Base Cover shall be offered on Indemnity basis whereas Optional Cover shall be made available on benefit basis.

Corona Rakshak Policy:

The Corona Rakshak Policy shall be followed by the insurance company’s name. The minimum sum insured under Covid Standard Health Policy shall be Rs 50,000/- and the maximum limit shall be Rs 2,50,000/- (in the multiples of fifty thousand).

Insurers have to offer Base Cover which shall be made available on benefit basis. For both the policies, only single premium payment mode shall be allowed.

Policy Period

The Corona Kavach Policy shall be offered with a policy term of 3.5 months, 6.5 months, and 9.5 months including the waiting period.

The Corona Rakshak Policy shall be offered with a policy term of 3.5 months, 6.5 months, and 9.5 months i.e. 105 days, 195 days and 285 days respectively.

Insurers shall provide a certificate of insurance to the policyholder indicating the availability of health insurance coverage.

Products Offered Under the Policy

I. Corona Kavach Policy

1. Base Cover: This cover provides indemnity for

• Covid Hospitalization Expenses:

• The policy will pay for hospitalization expenses incurred by the policyholder for the treatment of covid-19 on a positive diagnosis from a government-approved diagnostic center. It will cover room, boarding and nursing expenses.
• Surgeons, anesthetists, consultants, specialist fees, including consultation through telemedicine, will be covered.
• Other costs such as oxygen, operation theatre charges, surgical appliances, drugs and medicines, PPE kits and gloves among others will be admissible if hospitalized for a minimum of 24 hours. Intensive care unit and intensive cardiac care unit expenses will be covered too.

• Home Care Treatment Expenses:

• The policy also provides indemnity for at home treatment provided the medical practitioner advises home treatment and there is a continuous active line of treatment, which requires monitoring of health status by a medical practitioner.
• This benefit is available for a maximum period of 14 days per incident.
• Policyholders can avail of the services on a cashless basis, which shall be arranged by the insurer through network providers. If the services are availed from a non-network operator, reimbursement option shall be provided.
• Diagnostic tests conducted at home or at diagnostic centers, medicines prescribed in writing, consultation and nursing charges, and cost of the pulse oximeter, oxygen cylinder and nebulizer will be covered under the home care benefit.

Ayush treatment, pre-hospitalization expenses incurred 15 days before the date of hospitalization or home care treatment and post-hospitalization expenses incurred 30 days after the date of discharge from the hospital/completion of home care treatment shall be covered.

2. Optional Cover:

• The policy comes with an optional hospital daily cash cover in which the insurer will pay up to 0.5% of the sum insured for every 24 hours of hospitalization.
• The benefit will be payable for up to 15 days during a policy period.
• It shall be the insurance company’s discretion to decide the premiums and the policy will be made available on a family floater basis as well.

II. Corona Rakshak Policy

Covid Cover:

• The policy will pay a lump sum benefit equal to 100% of the sum insured if the policyholder tests positive for covid-19 and requires hospitalization for a minimum period of 72 hours. On payment of 100% of sum insured the policy shall be terminated.
• The product shall cover an individual only.
• The minimum sum insured shall be ₹50,000 and you can pick for a sum insured in multiples of ₹50,000 up to ₹2.5 lakh.
• An individual will be allowed to purchase only one such policy.
• It shall be the insurers’ discretion to decide the premiums.

Conclusion:

Every insurer will now offer at least one COVID-19 product which is the indemnity policy, and over and above this, they could choose to offer their own short-term plans. In these tough times, these insurance policies would act as nothing but a savior to fight COVID-19 financially as well.

Regards,

Legal Team

Proind Business Solutions Private Limited
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Email: info@proind.in, website: www.proind.in