Insurance
How should you insure yourself amid covid-19?
Summary
- As the second wave of the pandemic hits India, here is an insurance checklist. If you do not have health and life insurance, the pandemic is a good reminder to put some protection into place. If you already have such policies, you can increase the cover if it is inadequate.
As the second wave of the pandemic hits India, here is an insurance checklist. If you do not have health and life insurance, the pandemic is a good reminder to put some protection into place. If you already have such policies, you can increase the cover if it is inadequate.
Will your health policies cover covid?
The Insurance Regulatory and Development Authority of India (Irdai) had asked all insurers to accept any claims concerning the treatment of covid-19. This simply means that your existing regular/comprehensive health insurance policy will cover covid-related medical expenses. However only hospitalisation will be covered and not outpatient treatment. Your policy may also have sub-limits like room rent caps. Several reports suggest that people with comorbidities such as diabetes, hypertension, cardiovascular ailments or kidney disease are at greater risk of contracting coronavirus.
Are there covid-specific policies?
Yes. On the directions of Irdai, all health insurers came up with covid-specific health policies last year. The Covid-specific indemnity health policy or Corona Kavach covers hospitalisation expenses for the treatment on a positive diagnosis of covid-19. The max sum insured is ₹5 lakh. The covid-specific benefit-based health policy or Corona Rakshak offers a benefit equal to 100% sum insured, which will be payable on a positive diagnosis of covid. Max sum insured is ₹2.5 lakh. These policies were for periods of 3.5, 6.5 and 9.5 months. But, the window for buying such policies has been extended until 30 September 2021.
Should you buy a family floater?
If you have a family and you are looking for a cost-efficient option, you can buy a family floater health insurance. Family floater policies can be used to cover senior citizens, such as elderly parents. But, doing so will make the family floater plan a bit expensive as premiums are based on the age of the eldest member. Hence, you must buy individual health plans for them.
How much coverage should you have?
Covid treatment can prove quite expensive, particularly in advanced stages. If you are buying an individual health insurance policy, then you must have a cover of ₹5 lakh or more. If you are buying a family floater then you must ideally look for a cover of at least ₹10 lakh sum insured. This is what industry professionals typically suggest. You can also maximize the sum insured of your policy if you already have existing health insurance. You can buy a super top-up plan over and above your existing health policy.
What about life insurance?
If you have financial dependents, then life insurance is a must. Experts suggest term insurance which only pays out on death. The premiums on term insurance tend to be far lower than other types of insurance policies for a given level of sum assured. You can also add critical illness cover to your life insurance policy. The level of cover must be such that your future earnings would be replaced, but experts suggest cover that is 10 times your annual income. So if your annual income is ₹10 lakh, a cover of ₹1 crore can be looked at.
