COVID-19 Health Insurance Policy - Corona Kavach vs Corona Rakshak vs General Insurance

One may dislike the statement that Covid-19 will continue to exist in some form for 2021 too as we close up on one of the most dreaded and depressing years for human-kind. Cases continue to rise at an alarming pace in India as we also struggle to open our economy and open a way of normal life.

As instructed by the IRDAI (Insurance Regulatory and Development Authority of India), standalone health and general insurance companies started offering standard Corona Kavach and Corona Rakshak plans after July 2020.

As many of you may have already read about the risk of rising hospital bills as the number of cases continue to climb upwards. Hospitals are also being asked to maintain patient-distancing etc which requires them to charge a further premium than normal hospitalization. Normal Treatment costs are now hovering around 2 to 3 Lacs for patients without any comorbidities and 7 to 9 lacs for patients with comorbidities in cities like Delhi and Mumbai.

For individuals and Families already holding General Health Insurance plans, there is a high probability that your current Insurance company already covers Covid19. However, you must evaluate if the current policy sufficiently covers Hospitalization costs in an unfortunate scenario.

Usually most Health Insurance plans do not cover the cost of consumables like PPE Kits which are generally one time use. Though cost of consumables was not a big concern in the Pre-corona world, for Covid treatments the cost of consumables quickly add up (Goggles, N-95 masks, Face shields, disposable gloves, sheets etc) leading to a hefty hospital bill and all the deductions applied by health insurance companies.

Also many Health Insurance plans have cap for Room rent or ICU capping. COVID treatment currently requires isolated treatment, dedicated staff, One-time use consumables like PPE kits and Hospitals generally include all these additional costs under Room Rent head. It can lead to a significant out-of-pocket expense even if you have a coverage of 5 Lakh to 10 Lakh.

It is not unusual to see deductions of as much as 40% to 50% due to Room rent cappings, ICU Charges cappings etc. It’s also supported by a recent study by Times of India:

As one can see the average Claim size in India till July is Rs. 1.64 Lakh while the Settlement amount is only Rs. 0.8 Lakh. (50% settlement ratio)

Corona Rakshak is a single premium, lump-sum Health Insurance plan that allows policy holders to get sum-insured in case of hospitalization of 72 hours or more. The Lump-sum amount allows policy holders to take care of expenses like PPE Kits or room rent cappings which may be deducted under the standard health Insurance plan. If your standard health insurance plan does not have any cappings on Room rent or ICU Charges, you may not need to buy this additional cover.

Some other highlights of Corona Rakshak Plan:

• Coverage amount ranges from Rs. 50k to Rs. 2.5 Lakh.
• Lump-sum amount payable once and only after positive diagnosis of Covid19
• Short waiting period of 15 Days. (Claim can be filed only after 15 days)
• Premium paid eligible for Tax deduction under Section 80D
• Policy tenure of 3.5 months, 6.5 months and 9.5 months.
• Also includes Home Treatment of upto 14 days. Ayush Treatment is also covered.

One can currently buy Corona Rakshak Plan with Insurance companies like IFFCO and Star Health. Available at very limited companies maybe due to Lump-sum payment option

Our Recommendation: If your current policy has Room rent capping or ICU Charges capping, then Corona Rakshak plan is a good plan to buy as it gives you lump-sum payment in case of emergency. Similarly, if you do not have enough emergency funds to cover costs related to consumables etc, then this plan can give you peace of mind for Rs. 2500 investment.

Corona Kavach is Corona-specific standard indemnity-based health insurance plan which will cover Covid treatment along with any comorbidity conditions including pre-existing conditions. As per IRDAI instruction, this plan does not have any Room Rent cappings or any capping related to ICU treatment. It also fully covers consumables charges like PPE Kits, Masks, Hand gloves etc.

Some of the key highlights are:

• Tenure of 3.5 months to 9.5 Months
• Sum Insured ranges from Rs. 50,000 to 5 Lakh.
• Waiting period of 15 days (Same as Corona Rakshak Plan)
• Comes with a Family floater option as its standard indemnity plan.
• Only available for Individuals below 65 years of age.
• No limit on room rent & consumables like PPE kits will help pay for high hospital charges.
• Option to add ‘Hospital Daily Cash’ cover which is not available in Rakshak policy.

Our Recommendation: Individuals who don't have any Health Insurance plan or Individuals who have recently got health insurance and policy is under waiting period must consider this Health Insurance. If you do not have any emergency savings for standard deductions, then you may also consider this plan by paying a premium of 2k.

We have done a comparison of various options for Individual around 30 years old.

Dimers have strongly recommended Oriental Insurance in comments 

Above plans discussed are Corona specific and of much shorter tenure. If you are planning to buy a new Health Insurance Policy, You must refer to this thread by Dimer "@drjpatwa". It's an excellent compilation of all your common questions.

https://www.desidime.com/discu...

One of the Dimer "@Mirror" also wonderfully explains here the various options available to stay protected from financial burden which may arise due to hospitalization of family members..

There are 3 kind of Policies covering COVID-19 
1. General health Insurance Policy IRDAI directed all companies to cover COVID19 also in general health insurance policy so if you have that one, then no need to buy separately. If not then buy from Companies like Bajaj Allianz, ICICI Lombard, Max Bupa with higher settlement rates. Go Digit is a new startup and gives plans at lower rates than others. Kindly note there is a 30 days waiting period in all and the same apply on COVID19. Also this policy only covers hospitalization costs and bills.You must also check with your current Insurance company before buying a new plan.

2. COVID Specific Insurance Policy In March-April many companies were providing it but now only few give such service. You can buy those via tie up partners. This one covers hospitalization and medical expenses only for COVID19. Waiting period is just 15 days rather than 30 days in general health insurance policy. On Flipkart app, GoDigit provides Covid Policy with upto 3 lakh cover @ 1500 , it is cheaper than general health insurance because it only covers COVID19. On Paytm app, Reliance provides policy with upto 5 lakh cover @ 2500 but this one has a cap on daily room rent (last i confirmed with support) so avoid it. On Phonepe app, bajaj allianz provides upto Rs. 50,000 cover so not sufficient. On mobikwik app also, GoDigit provides the same plans as flipkart. If you are karnataka bank account holder then this is the best option - https://karnatakabank.com/Karn...

3. Lumpsum Amount Policy
On Flipkart and PhonePe, ICICI Lombard provides this policy. If you are diagnosed with covid positive then you will get fixed 25000rs as one time payment without any need of hospitalization. So this one is best for people who have mild symptoms or no symptoms and thus not hospitalized. But one still needs to buy some medicines at home, as they get recovered from disease at home itself without any difficulty. It costs only 159rs. Waiting period is the same - 15 days. Now one more thing in 1st policy it costs a huge amount for old aged people (really huge) so you can go for 2nd option. Otherwise people should always subscribe for general health insurance policy to avoid huge bills and uncertainty. Also at time of taking policy things to remember -

• Always clear all of your doubts with different agents because sometimes because of lack of knowledge or intentionally they give wrong info.
• Best thing is to read policy related documents properly.
• Must disclose pre existing disease (apply for general health insurance) which will be excluded for 2-4 years by them but in case of no disclosure they can deny your claim.
• Must check the room offered by policy and daily room rent capping, prefer one which provides no capping on room rent and provides all categories room or at least single private AC room.
• You can opt add on for daily hospitalization cash.

Feel free to comment below if you still have any doubts and community is always there to help you make sound financial decisions.