Just 3 months after the coronavirus was officially declared a pandemic in India, the IRDAI, in June 2020, announced the release of 2 Covid-specific insurance product mandates. These addressed basic health insurance needs of the public but allowed insurers to fix premium rates. The mandate to general and health insurers was to offer 2 standard COVID health policies from the 10th of July 2020 onwards. These were aptly named Corona Kavach and Corona Rakshak. The policies are issued for a short tenure of 3.5, 6.5 and 9.5 months, which helps to address a specific risk period for an affordable premium.
Corona Kavach – Corona Kavach is a health insurance policy designed to cover hospitalization and medical expenses incurred during the treatment of Covid-19. Claims will require that covid testing is done only by authorized diagnostic centers. This is a standard indemnity-based single premium health insurance policy.
Corona Rakshak – Corona Rakshak provides 100% of the sum insured if the person affected by coronavirus requires hospitalization for 72 hours or more. This is a standard benefit-based single premium health insurance policy. Again, the covid testing needs to be conducted by an authorized testing center only.
Market Reaction to standard Covid Insurance Policies
The last few quarters have seen a record increase in covid-specific insurance policy sales. Customers are clearly leaning towards sachetized insurance products. A few hurdles and slow-sales months notwithstanding, the sachetization, or breaking down of larger customizable insurance products into smaller pre-underwritten versions, is a concept that has become popular. The trend seems definitely here to stay. The inherent benefits customers find with newly packaged micro-insurance products is undeniable. Customers prefer specific areas of protection that seem more relevant for their specific risks.
Can you think of sachet insurance policies that you would like to see in the market?
Do you think standard insurance policies have helped the insurance market? Would we see more sachetized products from the insurers? Do you think there would be a surge in the sales of Covid specific insurance policies during a possible third wave of Covid-19?
Do share your opinions with us.