Topic 2: Who Should Buy The New Corona Kavach Insurance ?

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, Rakshak has not been made mandatory by the Insurance Regulatory and Development Authority of India (Irdai), which means insurers can decide whether they want to offer the product or not. With two standard policies for covid-19, you may find it difficult to pick the one that suits your needs. Read on to know if you must go for the Corona Rakshak policy

What does Corona Rakshak offer?.
Like Corona Kavach, Corona Rakshak too offers three policy tenures—105, 195 and 285 days. The minimum entry age is 18 and the maximum 65 years 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 center. For instance, if you opt for a ₹2.5 lakh sum insured, on hospitalization for covid-19 for three days, you will get a lump sum of ₹2.5 lakh. Once 100% of the sum insured is the paid, the policy will terminate. The policy is available on an individual basis only and does not have the floater option. Unlike regular health insurance plans, the Corona Rakshak policy cannot be renewed. You also don't have the option to migrate or port the policy from one insurer to another.

You already have less choice here as only a few insurers are offering Corona Rakshak.

Should you buy?
Understand that it may not be right to compare the Corona Kavach with the Corona Rakshak policy because both the products have different purposes. While the Kavach policy (indemnity) will pay for your hospitalization expenses, the Rakshak policy (defined benefit) is a means for income replacement.

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 whereas the Kavach policy does not have any sub-limits. “If you have pre-existing diseases and are lucky to get a policy then it could work in your favour as you will be covered after only a 15-day waiting period.

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.

If you already have adequate health insurance, going for Corona Rakshak makes sense for replacement of income because premiums 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.

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.

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