If you think a positive diagnosis for covid-19 could affect your income, Corona Rakshak will suit you
If you do not have any health insurance coverage, then you should buy the Corona Kavach policy
Most insurance companies have started offering the regulator-mandated standard indemnity health policy, Corona Kavach, for covid-19, but only a few have launched the standard benefit-based policy, Corona Rakshak. Though both these products target claims for covid-19, it’s not mandatory for insurers to offer Rakshak. Since the Insurance Regulatory and Development Authority of India (Irdai) has not mandated it, but only Kavach, should you buy Rakshak?
What does it offer?
Like Corona Kavach, Corona Rakshak too offers three policy tenures—105, 195 and 285 days or 3.5, 6.5 and 9.5 months, respectively.
The minimum entry age is 18 and the upper age limit, according to Irdai, shall not be less than 65, and there’s a 15-day waiting period. You can opt for a sum insured between ₹50,000 and ₹2.5 lakh in multiples of ₹50,000.
The policy will pay 100% of the sum insured if the policyholder is hospitalized for 72 hours on positive diagnosis for covid-19 from a government-authorized diagnostic centre. Once the sum insured is paid, the policy will terminate and there is no renewal option. You also don’t have the option to migrate or port the policy from one insurer to another.
The policy is available on an individual basis only and does not have the floater option.
How much does it cost?
Only a few insurers are offering Corona Rakshak. Among insurers who shared their rates with Mint, premiums for Future Generali India Insurance Co. Ltd’s Rakshak policy are on the lower end of the spectrum compared to those for Star Health and Allied Insurance Co. Ltd (see graph).
“The rate of infection is only increasing and on testing positive, we’ll have to pay the full sum insured. One can get hospitalized even for mild symptoms and once that happens we’ll have to settle the claim. The fact that we are a stand-alone health insurer means that we’ll have more claims coming our way. We’ve priced the product considering all these aspects," said S. Prakash, managing director, Star Health and Allied Insurance.
Note that depending on the pre-existing diseases and co-morbidities, the insurer may choose to increase the premium or choose to not sell the policy to you.
Should you buy?
Understand that it may not be right to compare the Corona Kavach with Corona Rakshak because both the products have different purposes. While the Kavach policy (indemnity) will pay for your hospitalization expenses, Rakshak (defined benefit) is meant for income replacement.
Mahavir Chopra, founder, Beshak.org, an independent research platform for insurance buyers, said people who have a policy with a lower sum insured or with any room rent limits could consider the Corona Kavach policy. Sub-limits could result in proportionate deductions and Kavach does not have any sub-limits. “If you have pre-existing diseases and are lucky to get a policy, it could work in your favour as you will be covered after a 15-day waiting period," he said.
Corona Rakshak could suit you if you already have a health insurance policy but feel that a positive diagnosis for covid-19 could result in loss of income. “It works for people looking at income replacement due to hospitalization. Also, any deduction that happens on the health insurance claim can be supplemented with this benefit-based policy. In regular health policies, sometimes PPEs (personal protection equipment) and other consumables may not be covered. This is where Rakshak could help," added Mahavir.
The premiums of Rakshak are only around 1-2% of the sum insured in the case of most insurers. But it’s important to note that one must get hospitalized for 72 hours to be eligible for a claim.
Naval Goel, CEO and founder, PolicyX, an online insurance aggregator, said if you have a regular indemnity-based policy, you should buy Corona Rakshak to avail benefits of fixed cost or if you’re the sole breadwinner in the household. “Don’t forget that most indemnity-based policies cover coronavirus. If you do not have any health insurance coverage, then you should look at buying the Corona Kavach policy. Corona Rakshak is ideal if your hospitalization may impact the household’s financial situation."
Chopra said from a policyholder standpoint, a 72 hours hospitalization period is reasonable. The only thing that one must compare is the premiums because the product is standard across insurers but the cost could vary largely.
Also, keep in mind that in case of individuals with underlying conditions, buying these policies may not be easy but if you’re already covered under a health insurance plan, there isn’t too much to worry about because all regular health insurance plans cover covid-19.