Standard covid product to be benefit-based cover under revised IRDAI rules

The minimum sum assured for the product will be Rs 50,000 and it can go upto a maximum of Rs 5 lakh

The insurance regulator has revised the guidelines for a standard Covid product, from the earlier draft. In the fresh draft, it has asked general and stand-alone health insurers to offer a “standard benefit-based product” rather than an indemnity-based one as proposed earlier.

The standard benefit-based product will offer a lump sum benefit — equal to 100 per cent of the sum insured — to be paid by insurers if the client tests positive, resulting in hospitalisation. “The diagnosis has to be confirmed by authorised centres as declared by the Ministry of Health and Family Welfare,” said the draft guidelines reviewed by Business Standard.

Minimum sum assured for the product will be Rs 50,000, which may rise to a maximum of Rs 5 lakh. A General Insurance Council official said these are still draft guidelines. They will be finalised only next week.

Earlier, the regulator had said insurers had to offer the standard Covid product by June 15, but it has now been pushed to June 30 because of the modifications.

It will include Quarantine cover as the only add-on, the premium for which will be specified separately to enable policyholders choose, based on the need. If the insured person is quarantined on account of suspected infection, then 50 per cent of the base sum insured has to be paid by the insurer.

“The total amount payable with respect to the base cover and add-on cover mentioned above, shall not exceed 100 per cent of the sum assured during a policy period,” the draft guidelines said.

There will be a 15-day waiting period, wherein the insurer shall not be liable for any claim. The product, however, will not provide coverage if testing is done at a diagnostic centre not authorised by the government, and home quarantine will not be covered.

The standard benefit-based Covid cover will be for a period of one year, and be offered on a family floater basis as well. Further, all modes of payment will be allowed such as quarterly, monthly, half-yearly and yearly. For yearly payment, a grace period of 30 days shall be granted, and for other modes, a 15-day grace period will be allowed.

The policy tenure of the product shall be of one year. The minimum entry age shall be 18 years, with the maximum at 65. Despite being a standard product, insurers will be free to price it based on their own assessment.

“It is supposed to help those who do not have any cover at all, or want to take additional cover. The price will be comparatively lower than traditional health products. Only in cases where patients have co-morbidities and need ventilators, have the hospitals bills been on the higher side, though not all patients need treatment of that kind,” said Sanjay Datta, chief (underwriting and claims), ICICI Lombard General Insurance.

Insurers had earlier called for existing health products to cover Covid-19 hospitalisation costs, and many are offering specific Covid products, but the idea now is to bring a standard product for people to get a sense of what is covered and what is not.