Policies for pandemics

While existing policies must cover virus, insurers have unveiled specific products

March 29, 2020 10:20 pm | Updated 10:20 pm IST

In case of life insurance, death due to COVID-19 would be payable as per terms and conditions.

In case of life insurance, death due to COVID-19 would be payable as per terms and conditions.

The world is cowering under the COVID19 threat. Let’s take a look at the insurance cover is available for those who get infected.

The first question that comes to mind is: will my hospitalisation policy pay for a COVID-19-related hospitalisation and treatment?

The answer seems clear, up to a point. Existing policies should cover hospitalisation unless specifically excluded or if epidemics and pandemics are excluded. Read your policy document for clarity. If neither is the case, we can conclude that coverage is available.

(In the case of other covers like property and liability, insurance companies do suspend cover under a force majeure clause which means natural and man-made disasters, including pandemics).

New products

The reason is a high number of claims can devastate the insurance industry. Should this happen, the role of the Insurance Regulatory and Development Authority of India (IRDAI) to direct and persuade the industry would be much looked forward to. As for health policies, IRDAI has issued a circular that new products cannot exclude pandemics.

Given that cover is available, the next question is, what will be covered. Hospitalisation expenses as well as 30 days pre-hospitalisation and 60 days post-hospitalisation expenses are standard covers on these policies.

COVID-19 test costs should be covered as should quarantine period medical expenses that are admissible. All claims will follow the policy scope and terms.

As it stands, new policies will exclude hospitalisation claims in the first 30 days except in cases where there was unbroken coverage in the preceding four years with no related claims in that period.

As for life insurance policies, death due to COVID-19 would be payable within the overall terms and conditions of the policy.

Coming back to health policies, there are new COVID-19-specific policies launched by some insurance companies, notably Star Health Insurance Company Ltd. and GoDigit. These are timely, if a bit restricted in coverage.

Star Health’s policy is a one-year benefit policy with sum insured options of ₹21,000 and ₹42,000. It pays out a lumpsum on hospitalisation and diagnosis of the COVID-19 infection. It does not provide coverage for hospitalisation expenses as such, but then the hospitalisation costs are being borne by the government.

The annual policy has a waiting period of 16 days from the commencement of cover, that takes care of the incubation period of the virus. Should the insured travel outside India during the policy period, no claim payment will be made.

GoDigit offers a benefit policy for ₹25,000 SI (sum insured) with conditions that the insured or his close family should not have travelled to specified countries after December 1, 2019. Those insured, who had displayed symptoms of COVID-19 in the six weeks preceding the policy, will also not be eligible for a claim.

DBS Bank India has tied-up with Bharti AXA General Insurance Company Limited to roll out a complimentary insurance plan for its customers covering all medical conditions, including COVID-19. The 30-day cover will pay ₹5,000 a day for up to 10 days of hospitalisation.

ICICI Lombard General Insurance Company Limited’s COVID-19 Protection Cover is also a benefit policy that pays the sum insured when the insured is declared COVID-19 positive.

Edelweiss General Insurance Company Limited has a COVID-19 policy that will be extended to those quarantined in specified government facilities.

(The writer is a business journalist specialising in insurance & corporate history)

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