After a long wait, the Insurance Regulatory and Development Authority of India (IRDAI) has published the guidelines for COVID-19 standard indemnity and benefit-based health policies. Now, insurance companies of all categories, such as life, general, and standalone medical insurance, can offer benefit-based plans. On the other hand, all general and health insurance companies must mandatorily offer indemnity policies.
The regulator had mandated that all insurance companies offer both the products in the draft guidelines earlier. However, there has been a slight change in the final guidelines.
The insurers are instructed to offer the indemnity policy from 10 July. Likewise, the benefit-based policies are to be rolled out around the same time as specified by the regulator. Though insurer doesn’t currently pay for personal protective equipment (PPE) and other hygiene-related products, the regulator has made it mandatory for COVID-19 indemnity policy to pay for items, such as PPEs, gloves, masks, and others. Another advantage with these policies is that there is no sub-limit on room rent. Similarly, there is a higher limit on expenses, such as doctor’s fees and nursing.
The regulator has given the freedom to insurers to choose their short-term policies. Since they are not long-term policies, there is no probability of long-tail risk. In the case of offering add-ons or a higher sum insured, insurers can choose what works best for them.
Features
- Minimum entry age: 18 years
- Maximum entry age: 65 years
- Dependent children eligible between 3 months and 25 years of age
- Indemnity policy includes family floater option
- Available policy tenures: 3.5 months, 6.5 months, and 9.5 months including the waiting period
- Premiums remain the same pan-India for both the products
- Payments must be made outright, and instalments are not available
- A waiting period of 15 days is applicable; no claims are accepted during the period
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Who Should Buy?
These policies are the right choice for frontline healthcare workers. The regulator has also instructed insurers to provide a 5% off on premiums for healthcare workers. Previously, insurers didn’t want to offer COVID-19 products to doctors due to the high risk associated.
Due to the short-term of the policies, premiums turn out to be affordable, making it accessible even for the generally uninsured population. For those who already have a regular health insurance plan, the pricing of the COVID-19 policies can make or break the sales.
Nowadays, regular health insurance policies cover COVID-19 treatment. Insurers are also considering to cover the costs of PPEs, to a certain extent, in the regular policies. Further, home care benefit need not be a reason for purchasing COVID-19 policies because a few regular health policies cover the benefit. Therefore, there may not be a dire need to buy another one if you already have health insurance.
Limitation
In the benefit-based product, the regulator has specified a cap on the sum insured, i.e. Rs.2.5 lakh and a mandatory requirement of hospitalisation for 72 hours.
We are going to give you a detailed flow of how the new COVID-19 indemnity and benefit-based policies will work in the next part of this article. So, stay tuned!
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
