The Insurance Regulatory and Development Authority of India (IRDAI) has recently published data which states that the life insurance sector has witnessed a year-on-year (Y-o-Y) deceleration of 4.24% in the first quarter of FY 2021. Additionally, CARE Ratings recently revealed that owing to the coronavirus pandemic, the life insurance sector witnessed a 18.6% drop in the first-year premium segment in this period. The overall sum has also dropped by 12.9% during the same period. Private sector players too, witnessed a fall of 19.2% till May, 2020. While the government undertaken Life Insurance Corporation (LIC) is still maintaining domination in the market share in the first-year premium segment, only five private players namely Aditya Birla Sun Life, Aviva Life, Canara-HSBC-Oriental Bank of Commerce Life, Tata AIA Life and Edelweiss Tokio Life have reported growth during the period. However, the rating firm has also assured that the sector can expect a recovery from the second quarter of the current fiscal.
There have been some bright spots as well. For instance, owing to poor automobile sales, the health insurance sector has overtaken the motor insurance sector for the first time. It stands as the largest portfolio in the general insurance category. The motor insurance business has plunged to 26%, according to the General Insurance Council. The healthcare related insurance sector could see improvement because of increased awareness amid the pandemic. Now the new corona related insurance policies are also expected to give the health insurance sector a boost.
Covid-related insurance policies
IRDAI, the apex regulatory body for the insurance sector appealed to 29 private sector insurance companies and mandated to introduce two new Covid related insurance policies - namely Corona Kavach and Corona Rakshak. Corona Kavach is an indemnity policy to cover hospital expenses for Covid patients. In this, insurers offer optional cover for daily hospital bills. The second policy termed as Corona Rakshak will provide a fixed benefit to the policyholder if he or she is hospitalised after being diagnosed with Covid.
The tenure of these policies can be three and a half months, six and a half months and nine and a half months. Frontline workers like doctors, nurses and other healthcare professionals can avail a 5% discount in the premium. These policies, introduced on July 10 - can be availed for patients aged between 18 and 65 years.
Corona Kavach and Corona Rakshak policies were introduced with a large range of offers. Corona Kavach, the first policy - can be taken for Rs. 50,000, Rs. 1 lakh, Rs. 1.5 lakh, Rs. 2 lakh, Rs. 2.5 lakh, Rs. 3 lakh, `Rs. .5 lakh, Rs. 4 lakh, Rs. 4.5 lakh and Rs. 5 lakh coverage. Pre-existing and co-morbid conditions are also covered. On the other hand, Corona Rakshak can be availed for Rs. 50,000, Rs. 1 lakh, Rs. 1.5 lakh, Rs. 2 lakh and Rs. 2.5 lakh coverage.
Samir Gupta, Owner and Founder, Future Line Investment, informed BE, “The conventional health insurance policies used to cover Covid but had few restrictions. As Covid treatment is not operation-based treatment and is more of a conservative line of treatment - maximum insurances had a capping. Under normal health insurance, only 1% of the hospital bills/hospital-bed fares are covered. Corona Kavach, being an indemnity policy will cover hospital expenses - like bed fare including the costs for doctors, PPEs, gloves, masks, oximeters, oxygen cylinders, nebulisers and other disposable items. It will also cover for a policyholder patient who is home quarantined.”
Talking about Corona Rakshak, Gupta added, “This insurance will offer complete coverage directly to the policyholder’s account if the patient is hospitalised for three days. This will be applicable even for public hospitals where the treatment cost is not as high as private hospitals. The premium rises accordingly with the increasing age of the policyholder. We are really experiencing increasing demand for these insurances because the Covid treatment is too costly in private hospitals.”
These Covid-related policies have been specifically designed for citizens who cannot afford the comprehensive healthcare plans. Aritra Dasgupta, a resident of North 24 Parganas, West Bengal, told BE, “As the healthcare cost seems to be very high in the private hospitals and it is tough to ensure beds in the public hospitals, our family has taken the Corona Kavach insurance. The premium is also quite affordable compared to the Rs. 5 lakh coverage on hospital bills. My father has to go out of home for his business and it is not possible to maintain social distance every time. So, the Covid related insurance is a big saviour for a middle class family like ours.”