Irdai guidelines on short-term Covid policies

The Insurance Regulatory and Development Authority of India (IRDAI) has now allowed life, general and health insurers to offer coronavirus specific short-term health insurance policies. These short-term policies will offer insurance for a period between 3 to 11 months. These policies are permitted to be offered both as individual and group products.

What are short-term health insurance policies?

As per the circular, short term health policy means any health insurance policy contract which has been issued for a policy term of less than 12 months. Short term policies could also be issued for a minimum term of 3 months to a maximum term of 11 months. 

With an objective of creating available insurance protection to varied sections of individuals within the prevailing COVID-19 pandemic, it's considered that short term insurance policies providing coverages specific to COVID-19 disease is that the need of the hour. Accordingly, all insurers (Life, General and Health Insurers) are allowed to offer COVID – 19 specific short term health insurance policies subject to these guidelines.

Short term health policy for the aim of those guidelines means any insurance policy contract which has been issued for a policy term of but 12 months.

Short term insurance policies are permitted to be devised offering insurance cover specific to only COVID-19.

This Short term policies are permitted to be offered both as individual or group products.

Short term policies could also be issued for a minimum term of three months to a maximum term of 11 months

A policy term but three months isn't permitted.

Where the term of policy is fixed as 12 months, an equivalent isn't considered as short term health policy.

Optional covers that enhance the insurance coverage are permitted to be offered for an equivalent policy duration.

No separate add-ons are permitted.

Insurers are advised to plan inclusive short term insurance products. Where waiting periods are a part of the merchandise , such waiting period shall not exceed fifteen days.

General and Health Insurers are permitted to supply both indemnity based and benefit based short term insurance policies.

Lifelong  renewability, migration and portability stipulated under Regulation 13 and 17 of IRDAI (Health Insurance) Regulations, 2016 respectively aren't applicable to the short term health policies offered by general and health insurers.

There are two sorts of COVID-19 special plans -- one is predicated on indemnity that pays the particular amount spent on the disease and another is benefit-based plan which will pay the whole lumpsum amount on the diagnosis of COVID-19 and subsequent requirement of hospitalisation. Health insurance companies offers both sorts of plans while life assurance companies will offer only benefit-based plans.

Benefit-based plans

In the benefit-based COVID-19 short-term plans, the policyholder will receive a lumpsum benefit adequate to 100 per cent of the sum insured if he tests positive for COVID-19 and requires hospitalisation for a minimum period of 72 hours.

Indemnity-based plans

Indemnity-based policy pays back the particular expenses incurred on the treatment of the covered diseases under specific conditions. IRDA has allowed only health insurers to supply this policy. It will come in two variants -- family floater and individual.

"It will cover room, boarding, and nursing expenses. Surgeons, anaesthetists, consultants, specialist fees, including consultation through telemedicine, are going to be covered. Other costs like oxygen, operation theatre charges, surgical appliances, drugs and medicines, PPE kits, and gloves, among others are going to be admissible if hospitalised for a minimum of 24 hours. Intensive care unit and intensive cardiac care unit expenses are going to be covered too.

This Covid-19 cover are often useful for somebody who doesn't have a insurance policy and is trying to find one to guard them amid the coronavirus pandemic. However, if you already have a regular or comprehensive health insurance policy you can avoid it given that Covid-19 is covered under these policies.

The impact of COVID-19 on millions of people directly or indirectly affects their daily life.

Besides, if you do not have any insurance plans, then you'll buy a COVID plan but you must recognize that the plan will only cover you for COVID-19 and you'll still be in danger, when it involves the other critical illnesses such as cancer, diabetes, heart-related ailments.