Who Should Opt for Indemnity-Type Covid Kavach Health Insurance

15-Jul-2020

As protection against the raging Covid pandemic, insurance regulator, Irdai, had directed all general and health insurers, on 26 June 2020, to come up with two standard Covid-specific plans—Covid Kavach and Covid Rakshak—by 10 July. While the mandatory Covid Kavach is an indemnity plan which pays for hospitalisation, Covid Rakshak is optional and a benefit-based plan, which means you get a lump sum on diagnosis from a government authorised diagnostic centre and on continuous hospitalisation of 72 hours. Some insurers have already brought out the products, while others are set to launch shortly.

Given the fact that there already exist in the market basic health plans covering the disease as well as Covid-specific plans, what was the need for another exclusive indemnity plan to cover Covid? More importantly, what should customers do?

“Covid Kavach is not only standardised, which means its features are uniform across insurers, but is also a more comprehensive version of the existing Covid plans. This is because it also covers homecare, PPE and treatment of co-morbidities when hospitalised,” says Gurdeep Singh Batra, Head, Retail Underwriting, Bajaj Allianz General Insurance. Since these are not covered by basic health plans, you may end up paying from your own pocket. The plan also covers ventilator and ICU charges, as well as the cost of oximeter and oxygen cylinder.

Secondly, the average size of health plan that people have is Rs 3-5 lakh, which may not be adequate for high costs of Rs 10-15 lakh involved in the treatment of Covid. “Besides, Covid is very contagious and the entire family may be affected. In such a case, the low cover will not be able to take care of even a single person, let alone all the family members,” says Bhabatosh Mishra,Director, Claims, Underwriting & Product, Max Bupa Health Insurance.

Since everyone may not have a high and a comprehensive cover, or may not be able to afford the high premium, or may have no health insurance at all, Kavach may be a good option to cover the enhanced risk in the current circumstances. With the Covid cases increasing at a fast pace, especially in bigger cities and metros, it may serve as an effective intermediary plan for the short term of 3-9 months. Besides, it can be used in combination with basic plans to increase the overall cover size. For instance, if you have a Rs 5 lakh basic plan that covers Covid, you can take a Rs 5 lakh Kavach plan to enhance your cover size to Rs 10 lakh.

As for Covid Rakshak, which offers a lump sum, it can be especially useful in case of home isolation and treatment because you can spend the money at will on medicine, treatment or nursing charges. Remember, however, that the maximum cover offered under Covid Rakshak is Rs 2.5 lakh as opposed to Rs 5 lakh for Kavach. “Also keep in mind that Kavach is only an ancillary product for a single disease and cannot be a replacement for the more comprehensive basic health plan,” says Mishra. So, you can use it to augment a basic plan or buy it if you have no plan at all, but after the risk has reduced, purchase an indemnity plan, which can even be Arogya Sanjeevani whose cover size has now been enhanced.

Source : Live Mint