The Coronavirus pandemic is getting worse day by day as more and more individuals are being infected globally. In India, as of 10th July 2020, there are more than 7.9 lakh active cases of COVID infection (Source: Times of India) while globally, the cases have touched the 12 million mark (Source: Worldometers) and the numbers are still climbing. As more and more individuals are falling prey to the virus, the need to face the financial implication of the illness has become important. While health insurance plans cover the cost of hospitalisation due to COVID, the cost of PPE kits and consumables are excluded. In case of COVID hospitalisation, such excluded costs constitute a primary portion of your medical bills and result in considerable out of pocket expenses. As such, the Insurance Regulatory and Development Authority of India (IRDAI) asked insurers to come up with a short-term COVID 19 health insurance plan.

An English proverb says “Necessity is the mother of invention” and the IRDA’s directive resulted in the birth of two COVID insurance plans – Corona Kavach Insurance and Corona Rakshak Insurance. Both these plans are short-term health insurance plans. Let’s understand what these plans are all about –

Corona Kavach Insurance Policy

The Corona Kavach insurance policy is an indemnity oriented health insurance plan which covers the costs incurred if you are hospitalised due to Coronavirus. The features of the policy are as follows –

• Individuals aged between 18 years and 65 years can buy the policy on an individual or family floater basis. For dependent children, the entry age is 1 day to 25 years.
• Under the family floater variant, self, spouse, dependent children, dependent parents and parents-in-law can be covered
• The sum insured start from INR 50,000 and goes up to INR 5 lakhs in multiples of INR 50,000
• There are three policy tenures to choose from – 3.5 months (105 days), 6.5 months (195 days)and 9.5 months (285 days)
• Coverage is available after a waiting period of 15 days. Coverage is offered only for hospitalisation due to COVID.
• The plan does not offer the benefits of lifelong renewals or portability
• Pre-existing illnesses as well as co-morbidities are covered under the policy
• A single premium is payable to buy the plan

Coverage under the COVID Kavach health insurance plan is offered for the following –

• Room rent
• Boarding and nursing expenses
• ICU and ICCU room rent
• Fees payable to surgeons, doctors, consultants, anaesthetists and medical practitioners
• Cost of anaesthesia, oxygen, blood, ventilator, surgical appliances, medicines, diagnostics, PPE kits, masks, gloves and other consumables
• Cost of ambulance up to INR 2000
• Treatment taken at home for up to 14 days after being diagnosed COVID positive. In such cases, the cost of diagnostics, medicines, consultations, oximeter, nursing expenses, etc. would be covered
• AYUSH treatments for COVID
• Pre-hospitalisation expenses for 15 days
• Post hospitalisation expenses for 30 days

Moreover, there is an add-on hospital cash benefit allowance which can be chosen at an additional premium. This benefit pays 0.5% of the sum insured for each day of hospitalisation for up to 15 days.

Corona Rakshak Health Insurance

Another standard COVID 19 health insurance plan is the Corona Rakshak health insurance plan. Contrary to Corona Kavach insurance, this plan is a fixed benefit health insurance plan. This means that the plan pays a lump sum benefit if you test positive for Coronavirus. The features of the plan are as follows –

• The plan is available on an individual sum insured basis only
• Claim is paid if you are tested positive for Coronavirus and you are hospitalised for at least 72 continuous hours
• Spouse, dependent children, dependent parents and parents-in-law can be covered under the policy on an individual sum insured basis
• The policy comes in three durations – 3.5 months (105 days), 6.5 months (195 days)and 9.5 months (285 days)
• Sum insured is available from INR 50,000 to INR 2.5 lakhs in multiples of INR 50,000

Premium rates

Being short term, COVID specific health insurance plans, the premiums of both the policies are low and affordable. Here is a comparative chart showing the details of both Corona Kavach insurance premium and Corona Rakshak insurance premium charged by Future Generali at different parameters if the sum insured is chosen to be INR 2.5 lakhs under both the plans –

Difference between the plans

Though both Corona Kavach insurance and Corona Rakshak plan are standard health plans offered solely for covering the medical costs incurred due to Coronavirus infection, both these plans are different. Here is a table showing the comparative difference between the two –

Which one should you buy?

Both these policies are suitable for your short term coverage needs against COVID infection. If you already have an existing indemnity health plan, remember that the plan would not cover the cost of consumables in case of COVID hospitalisation. Since the cost of consumables would be high, you can buy Corona Kavach insurance which covers all possible costs incurred if you are hospitalised due to COVID. In fact, the COVID Kavach insurance plan also covers home treatment expenses thereby allowing you coverage for home quarantine too. While your normal health plan might not provide coverage for home treatments, the Corona Kavach insurance policy would and it would cover all possible costs incurred in treating you. The premiums are also quite low making the plan all the more feasible.

When it comes to Corona Rakshak health insurance plan, it gives you a lump sum benefit on hospitalisation for 72 hours or more. This benefit would help you meet the non-medical financial costs which you might suffer if you are tested positive for COVID. The plan, therefore, acts as a supplemental coverage which you can opt for if you have an existing indemnity policy. The lump sum benefit paid under the plan can be used to pay for the cost of consumables which are excluded from the claim of your normal health plan.

Both these policies are the need of the hour when COVID cases have become as common as the common flu. With more and more households falling victim to this dreaded illness, it is better to have complete coverage for the possible medical expenses that you would incur if you suffer from the infection. Corona Kavach and Corona Rakshak are short-term plans which cost low but provide complete financial protection against the medical expenses of COVID. So, invest in these plans and secure your finances against this pandemic.

Medical expenses have become unaffordable for the common man and given the rising trend of medical inflation, the costs are expected to increase in the coming time. Given the unaffordability of medical expenses, a health insurance policy becomes the most important part of your financial portfolio. The policy covers the medical expenses which are incurred if you or your family member is hospitalised giving you financial relief. These health insurance policies are offered as annual contracts which you need to renew every year for continued coverage. Moreover, with lifelong renewability available under all health insurance plans, if you renew the policies on time, you can enjoy coverage for as long as you live.

While health insurance plans come as an annual contract, there are long term health insurance policies too which provide you continued coverage for a specified duration. Do you know what these long term insurance plans are all about?

What is a long term health insurance policy?

A long term health insurance policy is nothing but a health insurance policy which is offered for two or three consecutive years at once. You are required to pay the aggregate premium for the duration of the coverage at once when you buy the plan and then the long term policy provides continuous coverage for the said duration without the need of annual renewals.

Features of long term insurance plans

 Long term health plans have the following salient features –

• The policy is issued for a period of two or three years as per your choice
• The premium is usually payable at once when buying the policy. However, many companies are also allowing the facility of instalment premiums wherein you can avail long term insurance plans by paying premiums in instalments.
• There is a premium discount when you choose a long term duration
• The no-claim bonus is added on an annual basis even when you have a long term insurance plan

Long term v/s short term health insurance plans – the pros and cons

Long term insurance plans have both merits and demerits compared to short term health insurance plans. Let’s have a look at what they are –

Pros 

1. No hassles of annual renewals

   Short term health insurance plans require you to renew them after the end of every year for continuous coverage. This might lead to a possible lapse of the coverage if you forget to renew within the due date. In long term insurance plans, however, there is no hassle of annual renewal. Once you buy the policy, you are secured of the coverage for a continuous tenure of two or three years. 

2. Less probability of lapse

   Renewing yearly has a high risk of lapse because of the high frequency of renewing year on year. Compared to this, under long term health insurance plans, since the frequency of renewals is reduced, the probability of lapse is also reduced.

3. Premium discounts

   There is a marked benefit in opting for long term insurance plans as you get a premium discount in choosing a multi-year policy. This discount ranges from 5% to 10% and lowers the effective premium payable for annual health insurance coverage. This discount is not available under short term health insurance plans making their premiums dearer.

Cons

1. Loss in tax benefit

   When you buy a long term insurance policy and pay the premium at once, you are able to claim a deduction from your taxable income in the year in which you pay the premium. In the next year, since no premium is paid, the tax deduction is lost. So, while in the first year, you can save a higher tax, in the subsequent years, when the policy is running, you lose the tax saving benefit of buying a health insurance policy. Short term plans require annual premiums and therefore, provide annual tax savings on the premiums paid.

2. Inability to port the policy

   After buying a long term policy, if you are dissatisfied with the plan or the insurance company, you would not be able to port the policy to another insurer for the coverage duration that you have already opted for. This limits portability and you are stuck with the insurance policy for the long term duration that you have selected. Since short term health insurance plans are annual plans, you can port to another policy on renewal if you are not satisfied with the plan that you have bought or the insurance company. 

3. A higher pocket pinch

   Since you are required to pay the premium of a long term insurance plan upfront when buying the policy, you suffer a higher pocket pinch. Even though the effective annual premium comes out to be lower than the premium payable for a short term plan, the aggregate premium payable might prove to be unaffordable for some.

Benefits of buying long term insurance plans

While the above-mentioned pros and cons highlight the benefits and drawbacks of long term policies, here is a quick guide to the benefits of such health insurance plans –

1. You are freed from the hassle of renewing the policy every year
2. You are assured of a long term coverage without the possibility of lapse during the coverage tenure
3. You can claim a higher tax deduction in the year you buy the long term insurance plan since you pay a higher premium upfront to buy the policy
4. You can enjoy premium discounts of up to 10% when buying a long term health insurance policy

So, to avoid remembering to renew the policy every year, you can buy long term insurance plans. It would cut down your efforts of maintaining your health insurance coverage and would ensure that you afford the medical expenses suffered in a medical contingency.

How to choose the right long term insurance plan?

There are a variety of long term health insurance plans available in the market. As such, when buying a policy for yourself, you should be careful in the product that you choose. The following factors should be kept in mind when choosing the right long term insurance plan –

• Choose an all-inclusive scope of coverage

  Different health insurance plans allow different coverage benefits and so you should choose a plan which has the most coverage benefits to cover all medical expenses. A plan with an inclusive scope of coverage would cover maximum medical expenses thereby reducing your out-of-pocket costs.

• Avoid sub-limits

  Under some long term health insurance plans, there might be sub-limits on room rent. These sub-limits limit the coverage available and if you get admitted in a room with a higher rent, your entire claim amount would be reduced. Thus, opt for plans which have no sub-limits so that you can enjoy maximum coverage from your policy.

• Check the premiums vis-à-vis coverage 

  It is foolish to compare apples to oranges. Therefore, when comparing health insurance plans, you should always compare the premiums vis-à-vis the coverage offered by the plan. Compare premiums of those plans which offer similar coverage benefits and then choose the policy which allows the lowest premium without compromising on the coverage.

• Check the network hospital list

  If you want to avail the benefit of cashless treatments, you should be admitted to a hospital which is tied-up with the insurance company. In case of non-networked hospitals, claims are settled through reimbursement which causes an unnecessary financial strain on you. So, before buying a plan, check its list of networked hospitals. If the plan has tie-ups with the hospitals in your vicinity, choose them for availing easy claim settlements.

• Maximize the discounts

  Long term insurance plans allow attractive premium discounts for choosing long term coverage period, for adding family members, for being healthy, etc. Look for these discounts offered by the different plans and choose a plan which offers the maximum possible discount. The higher the discount that you get the lower would be the premium charged.

  To ensure all these factors are considered, you should always compare and choose the most suitable long term insurance policy for your needs. Also ensure that all your family members are covered under the plan and opt for a sum insured which is sufficient enough to cover the expected medical costs.

Top long term health insurance plans in India

Here is a list of some of the best long term insurance plans available in the market –

How to buy long term insurance plans?

You can buy long term health insurance plans online after comparing the available plans and then choosing the one which is the most suitable. Online policies can be bought at your convenience either from the company’s website or from the website of an insurance aggregator. Turtlemint is also a platform which allows you to buy a long term insurance policy online after comparison. Turtlemint is tied-up with leading health insurance companies giving you the option of some of the best long term health insurance plans available in the market. You can, then, compare the available plans on their coverage benefits and premium rates and then choose a suitable policy. After selecting the policy, you can also buy it online directly from Turtlemint by paying the premium digitally. Once bought, the policy would be issued and you would get the copy of the policy in your email. Turtlemint also helps you with your health insurance claims. In case of a claim you can simply contact Turtlemint and its claim team would help you get your claim settled at the earliest. 

Frequently Asked Questions

1. Can I switch insurers in a long term insurance plan?

   Switching insurers is called portability and this portability is allowed at the time of renewal when the duration of the policy comes to an end. Thus, in a long term insurance policy, you cannot switch insurance companies during the coverage duration. You would have to wait for the duration to complete after which such switching would be allowed.

2. Will my no claim bonus be affected in a long term health insurance policy?

   No, there would be no affect in your no claim bonus in a long term insurance policy. The no claim bonus would be allowed after every claim-free year irrespective of whether you have bought a long term health insurance policy or a short term one.

3. Can senior citizens buy a long term policy?

   Yes, many senior citizen health insurance plans allow long term coverage for senior citizens. You can, therefore, choose such plans to avail long term coverage.

4. Can I add riders under a long term insurance policy?

   Yes, you can add riders to a long term insurance policy. These riders can be added either at the time of buying a policy or at the time of renewing the policy.

5. Can a new member be added to the coverage in a long term insurance policy?

   Yes, a new family member can be added to the coverage mid-term in a long term insurance plan. This addition can be done by paying a proportionate additional premium to the insurance company along with a written request to add the member to the coverage.

6. What happens to the pre-existing waiting period in long term health insurance policies?

   The pre-existing waiting period does not get affected in a long term health insurance plan. The waiting period gets reduced after the completion of each policy year whether you opt for a long term health plan or an annual policy.

The Coronavirus pandemic is spreading despite the various efforts taken by the Government and the health department. More and more individuals are getting infected even as the lockdown curbs are easing in many parts of the country. If you read the newspapers or watch the news, you would know that the numbers have crossed 3.5 million and they are rising everyday!!

The infection is resulting in hospitalisation and, in certain cases, even death. In case of hospitalisation in a Government hospital, the charges are minimal or even nil. But if you seek hospitalisation in a private hospital, be prepared to face huge costs. Private hospitalisation is expensive and the costs are considerably high making it difficult for an average man to bear. This is where you can call on your health insurance plans. The plans cover the hospitalisation expenses incurred due to COVID infection thereby helping you financially. Moreover, in case of death of an individual, life insurance plans provide the much needed financial assistance to the deceased’s family. 

Because insurance can play an important role in tackling the financial implication of this pandemic, the Insurance Regulatory and Development Authority of India (IRDAI) has issued various guidelines for health insurance companies. These guidelines have been issued in the interests of policyholders so that their health insurance plans can come to their rescue in case of COVID related claims. Here’s what the guidelines say –

For health insurance claims which cover hospitalisation expenses –

• If the health insurance policy covers hospitalisation, insurance companies should settle COVID-related claims of hospitalisation quickly
• The medical costs incurred by policyholders during hospitalisation due to the virus and also during the quarantine period should be settled as per the terms and conditions of the policy. Moreover, the settlement should be in compliance with the regulatory framework. In case of home quarantine however, claims would not be admissible.
• If a claim is being rejected or repudiated, the claim should be thoroughly reviewed by the claim review committee of the insurance company before such rejection or repudiation

Health insurance companies are also encouraged to offer COVID specific health insurance policies which would cover the treatment costs of the virus effectively.

The guidelines were issued by the IRDAI on 4th March 2020 under the provisions of Section 14(2)(e) of the IRDA Act, 1999 and they came into force immediately.

Though there were no specific guidelines for life insurance companies, they were urged by IRDAI to handle their death claims in an expeditious manner so that the family of the policyholders can get claim settlements as quickly as possible. 

These guidelines are proving beneficial for policyholders who are facing the threat of COVID infection. They are being able to make claims in their policies easily. You should also know these guidelines so that you know what to expect from your health insurance plans and how to handle your claims in case of an emergency.