As cases rise sharply, Corona Kavach policy a big hit amongst consumers

The high demand for the policy has brought cheer for insurance companies

The fear of contracting coronavirus is pushing more and more individuals to cover themselves under standard health insurance policies such as Corona Kavach. Launched last month, the Kavach plan has seen positive uptake from customers.

The product was launched on July 10, with the insurance regulator giving its nod to 30 non-life insurers to offer the product forthwith. According to the regulator’s mandate, it has to be offered by all health insurers, despite traditional health policies covering Covid care.

Given a large section of the population still does not have health insurance cover, the idea was to offer policyholders protection against the contagion at an affordable premium. 

From July 10, when it was launched till 7th August for which information is available with us, 1,087,030 lives have been covered under Corona Kavach through 648,276 policies with premium of Rs 182 crore and sum assured for Rs 42,956 crore. In addition, 186,347 lives have been covered under Corona Rakshak through 156,695 policies with premium of Rs 25.5 crore and sum assured for Rs 3,293 crore, an Irdai official said.

“We did not anticipate that the product would gain so much traction. We are seeing increasing demand from millennials,” said a senior public sector insurer.

Echoing his sentiment, Gurdeep Singh Batra, head-retail underwriting, Bajaj Allianz General Insurance, said, “This is bringing cheer to insurers.”

The agency network is where insurers are seeing more traction for the policy. “We have seen 70 per cent of the business coming through the agency network. Of all the tenors available, consumers are choosing to buy six and a half month- and nine and a half month-policies,” added Batra.  

Amit Chhabra, business head–health at PolicyBazaar, said, “We started selling it three weeks back and very quickly, we were selling 1,000 policies a day. People are mostly buying the Rs 5-lakh sum insured and the tenor in most cases is nine and a half months. The average premium customers are paying is Rs 1,900.”

Unlike Corona Kavach, Corona Rakshak has not seen much traction because of availability. Since it was not a mandatory cover like the Kavach, only a few insurers offer it. The maximum sum insured is just Rs 2.5 lakh, compared to Rs 5-lakh sum insured for Corona Kavach.

Insurance experts said while buying the Corona Kavach policy, people are actually comparing the dedicated Covid-19 product with normal health policies. It has been seen that people are preferring to buy normal health cover over the Covid cover.

“Wherever affordability is not a concern, more and more people end up buying the normal health insurance cover. People who cannot afford a normal health cover but still want protection against uncertainties, end up buying the Corona Kavach,” said Chhabra.

“If we look at it geographically, wherever the number of cases are rising, we are seeing greater demand for a Covid-tailored  policy. In cities like Delhi where cases are falling, demand , too, has petered out,” added Chhabra.

“We have sold around 10,000 policies so far. The data shows there is demand for short-term Covid-specific covers, especially among first-time buyers of health insurance. Eighty-five per cent of policies sold are Rs 5-lakh covers, with 80 per cent being for a nine and a half-month duration. The highest purchase of the Corona Kavach plan is by millennials — 43 per cent buyers are in the age group of 18-30 years,” said Bhabatosh Mishra, director–products, underwriting & claims, Max Bupa Health Insurance.

The Corona Kavach policy is an indemnity cover, with an optional cover that will be made available on a benefit basis. This indemnity cover takes care of hospitalisation expenses incurred by the insured for the treatment of Covid-19 on positive diagnosis. All costs relating to room, nursing expenses, medical consultation, including telemedicine, personal protective equipment kit, and intensive care unit, are covered under the policy. It also includes the cost of treatment for other comorbidities, including pre-existing comorbid conditions along with the treatment for Covid-19.

The regulator recently allowed insurers to sell the policy as a group Insurance product, so that more and more people come within the insurance ambit.

Here are highlights about the insurance scheme: 

Corona Kavach policy, launched last month, is seeing huge traction amongst consumers

Irdai chairman said around 450,000 individuals have been covered under it

Insurers say the policy is seeing huge demand from the young generation

Mostly, the six and half months and nine and a half months tenure is being purchased

And, consumers are opting for Rs 5 lakh sum insured

Where affordability is not a problem, people are looking to buy comprehensive health policies

While Corona Kavach has seen good traction, Corona Rakshak has not seen much demand