Month: August 2020

The number of Coronavirus cases is increasing with no relief in sight as India is expected to record the highest number of cases in the world. Since a vaccine is still in its development stage, people are looking at health insurance plans to solve their immediate financial needs if they test positive for Coronavirus and require hospitalisation. Health insurance plans have, therefore, become important in these testing times.

Normal health insurance plans allow coverage for COVID related hospitalisation and treatment. However, the cost of consumables like gloves, sanitizers, face masks, etc., is not covered under a normal policy. Since these costs are considerable, considerable out-of-pocket expenses would be incurred even after having a health insurance policy. Moreover, home treatments for COVID might not be covered under health insurance plans. Keeping these factors in mind and the need of a health cover for COVID, two new plans were launched – Corona Kavach and Corona Rakshak. 

Both these policies cover COVID related claims. However, while the former is an indemnity policy, the latter is a fixed benefit plan. This causes confusion for individuals as to which plan they should choose: indemnity or fixed benefit? 

Indemnity health plans are those which cover the actual medical costs incurred while fixed benefit plans pay a lump sum benefit in case of claims. So, while under Corona Kavach your hospitalisation bills would be covered, Corona Rakshak would pay a lump sum benefit if you suffer from Coronavirus and are hospitalised for three continuous days. So which to choose?

Let’s analyse the options in different situations –

• When you already have a health plan

  When you have an existing health insurance policy, your policy would cover COVID related hospitalisations partially. For full coverage you can opt for Corona Kavach plan and get covered for all medical costs if you are hospitalised for 24 hours or more. 

  Alternatively, you can buy Corona Rakshak and get a lump sum benefit. This benefit would help you cover –

  • Additional medical costs not covered by your health insurance policy
  • Lifestyle expenses when you are indisposed
  • Any loan EMIs which you are unable to pay because of loss of job, salary cut or loss of income due to business shutdown

  In fact, a Corona Rakshak policy would make more sense in these cases since it would provide a holistic coverage for your financial needs when you suffer from Coronavirus.

• If you don’t have a health insurance plan

  If you don’t have a health insurance policy altogether, opt for a Corona Kavach plan. The plan would cover your hospitalisation expenses incurred on COVID with a short waiting period of 15 days. Under other normal indemnity health plans, this initial waiting period can go up to 30 to 90 days which would not be feasible for COVID which is spreading so fast. So, for your short-term needs, you can opt for Corona Kavach and get covered for the hospitalisation expenses incurred on COVID. However, you should also buy a comprehensive regular indemnity health plan for coverage of other illnesses and injuries.

  A Corona Rakshak policy can also be taken, in addition, for getting complete financial assistance for other expenses which you might incur due to COVID. While the Kavach policy would take care of your hospitalisation costs, the Rakshak policy would provide coverage for all other costs which you might incur.

The bottom line

While both Kavach and Rakshak have been developed specifically for covering COVID, the choice between the two ultimately rests in your hands and whether or not you have an existing health plan. If you have an existing health plan, Corona Rakshak would be a good solution and if you don’t, you should opt for Corona Kavach and supplement it with a Corona Rakshak plan. The premiums of both these policies are quite low. You can, therefore, choose both the plans for a comprehensive scope of coverage too. So, assess your needs and then make a choice.

Ever since Coronavirus changed its status from being an epidemic to becoming a pandemic, 21st century is split into three timelines – pre-COVID, COVID and post-COVID years. Currently, you are in the COVID timeline where the cases are increasing day by day. Though the initial lockdown checked the spread of the virus, ever since the Government has unlocked the country, the numbers are rising. Today, more and more people are facing the threat of infection which has, thus, put a spotlight on health insurance.

Max Bupa conducted a survey among individuals in eleven main cities of India to find out the need of the hour given the current crisis. Here’s what they found –

• 10% of the respondents wanted to invest in health insurance pre-COVID 
• 71% of the respondents feel a health insurance plan is a must for meeting COVID costs today
• 73% are willing to pay a higher premium for a policy which would cover COVID related hospitalisation
• 73% are more worried about health related expenses than other future goals
• 72% of the respondents are ready to buy a COVID health insurance policy immediately

(Source: Financial Express) 

These figures have made one thing certain – health insurance is the need of the hour in today’s COVID times when nobody knows when this pandemic would subside.

Do you know why health insurance has suddenly become a priority? Let’s find out –

• Increasing number of cases

  As on 7th August 2020, India’s COVID tally crossed the 20.30 lakh mark. (Source: Worldometers). Every day tens of thousands of new cases are adding to the total tally and there seems to be no respite. As the cases are increasing, individuals are finding themselves more and more prone to contracting the virus. As the chances of infection are becoming more probable by the passing minute, individuals want to insure themselves under a health plan so that in case they get infected, the plan would cover the cost of hospitalisation and quality medical care.

• Preference for private hospitalisation

  Even though the Government is treating COVID patients free or at negligible costs at Government hospitals, people prefer private hospitalisation. Basic amenities and the quality of care is perceived to be better in private hospitals and so the preference. However, private hospitals are costly. Hospitalisation for even a mild case of Coronavirus might result in INR 30,000 to INR 50,000 on a daily basis and given the need of a prolonged stay, the costs become unaffordable. A health plan, is therefore, needed to enable individuals the facility of private hospitalisation.

• Loss of job and/or reduction in income levels

  Following the nationwide lockdown, migration of workers, reduced demand and uncertainty, the economy has slowed down considerably. Many small and big businesses have handed the pink slips and/or imposed a salary cut. In these difficult times, individuals want to protect their savings against the possible financial threat of COVID infection. As such, they are willing to invest in health plans for financial security.

These reasons, therefore, have made health insurance the number one priority among consumers besides masks and sanitizers. Two new COVID specific plans have also been launched, Corona Kavach and Corona Rakshak, which are solely to cover the medical expenses of COVID infection.

So, if you have not yet insured yourself under a health plan, don’t delay. If you have a health plan, review the sufficiency of the coverage. An optimal sum insured is a must and so you should enhance your coverage if needed. The end to this pandemic is not in sight as yet but you can definitely build immunity for your finances through a health insurance plan. So, invest in health insurance to face the expenses which the infection would result in if it does strike and be prepared.

In the current Coronavirus pandemic, having a health insurance policy has become a must. As the number of positive cases is increasing every passing day, more and more individuals are prone to contracting the virus. Hospitalisation due to Coronavirus can incur considerable medical costs and so a health insurance policy has become the need of the hour.

Though the importance of health insurance is being felt among many, paying the premium for the policy is challenging for many when COVID has had such a negative economic impact. Job cuts, pay cuts and uncertainty in business are some of the major economic impacts of the pandemic. In these situations, affording health insurance premiums can be a challenge. Keeping this in mind, the Insurance Regulatory and Development Authority of India (IRDAI) has introduced the concept of instalment premiums in health insurance. Do you know what the concept means?

 Paying health insurance premiums in instalments

The insurance regulator, IRDAI, has allowed health insurance premium payments in instalments. While life insurance premium payments are allowed to be paid monthly, quarterly, half-yearly or annually, the same facility is now being offered under health insurance plans. Thus, you can pay your health insurance premiums monthly, quarterly or half-yearly rather than in lump sum.

What it means for you?

Here are some of the benefits which you can avail from this facility of instalment premiums in your health insurance plan –

• Affordable premium

  The main idea behind the introduction of instalment premiums was to make health insurance affordable for you. Thus, in current times when health insurance is a must, you can easily buy the policy and afford the coverage by paying premiums in instalments.

• Possibility to avail higher coverage

  An optimal sum insured is a must to meet the expensive medical costs which incur in a medical emergency. Now, with the benefit of instalment premiums, you can easily afford a high coverage level in your health insurance policy. A high coverage level would cover your medical expenses sufficiently and protect your savings thereby giving you financial relief.

What is means for insurance companies?

As health insurance policies become affordable for many, health insurers can expect an increase in the demand of their products. This would increase their premium collection and boost their revenues. Moreover, the facility of instalment premium would boost the popularity of health plans making it profitable for health insurance companies.

What it means for the insurance sector?

The introduction of instalment premiums is a major boost for the insurance segment as a whole. As health insurance plans become popular, insurance penetration is expected to increase. Moreover, as high coverage levels become affordable, the insurance industry would grow on the increased premium that they can earn.

A few things to check!

Though paying premiums in instalments is good news for you, here are some aspects of such facility which you should know –

• Some companies might put loading on monthly or quarterly premiums and offer discounts in annual premiums. For instance, if the annual premium for a policy is INR 10,000, you might have to pay INR 900 every month if you choose the monthly mode of premium. Alternatively, if the annual premium is INR 12,000 and the monthly premium is INR 1000, you might enjoy a discount if you choose to pay the premium annually.
• If you are paying premiums in instalments and there is a claim before the full premium payment has been done, there would be two choices. One, you would have to clear the outstanding premium before the insurance company settles the claim. Two, you do not pay the outstanding premium and the insurance company deducts the premium from the claim amount. For instance, if you are paying a monthly premium of INR 900 and there is a claim in the 6th month, you can either pay INR 5400 and receive the full claim amount, or the insurance company would deduct INR 5400 from the claim amount payable.
• The facility of instalment premium is being offered in the current situation when the pandemic has caused economic disturbances. The facility might be continued in future or it might even stop depending on the insurance company’s practices.

EMI payments have always found favour with customers who can make big purchases and then pay for them in small and affordable investments. The facility of instalment premiums is, therefore, beneficial for you as you can afford a higher coverage and invest in a comprehensive health insurance plan. So, choose this facility and opt for an optimal sum insured. If, however, you can pay the premium in one lump sum, you can also opt for annual premium. So, assess the suitability and make a choice but do invest in health insurance for financial security in these times of crisis.