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Those who don't have comprehensive health cover may consider a Covid-specific policy

Edelweiss Tokio Life Insurance has launched Covid Shield+, a single-disea­se cover that combines a critical illness (CI) benefit and a term cover. Stan­dard Covid-specific policies like Corona Kav­ach and Corona Rakshak already exist. So, evaluate the pros and cons of this new policy to see if it suits your needs.     

How it works: 

Covid Shield+ has a small base cover, equal to 1.25 times the premium. Once a person who has this policy is diagnosed with Covid-19, the enhanced sum insured, which can range from Rs 25-50 lakh, is triggered. If after the diagnosis the person dies during the policy tenure, the term cover will be paid to the family.

The policy also offers a CI benefit (a fixed benefit). This will get triggered if after the diagnosis of Covid-19 the insured is admitted to an intensive care unit (ICU) or a high-dependency unit (HDU) and spends at least 24 hours there. The CI benefit is 40 per cent of the enhanced sum insured and can range from Rs 10-20 lakh. “Expenses due to Covid-19 can be considerable. It forces people to dip into savings tied to other long-term goals. So, we have offered a comprehensive policy that will offer both CI benefit and death cover,” says Subhrajit Mukho­pa­dhyay, executive director, Edelweiss Tokio Life Insurance.  

Pros and cons:

CI benefit is useful as it gets triggered once the condition is fulfilled. The insured is paid the full amount, irrespective of cost incurred. “In an indemnity-based plan, only a part of the cost may be paid for a variety of reasons,” says Deepesh Rag­haw, founder, Personal­Finan­cePlan, a Securities and Exchange Board of India-registered investment advisor. The money can be used to meet non-medical expenses that inevitably arise. The term cover will help protect the family’s financial goals in case of the breadwinner’s premature demise.    

As with all disease-specific policies, this one will not cover you against any other disease. Also, the CI benefit will only get triggered if the insured is admitted to an ICU or HDU. “Milder cases don’t get admitted in an ICU or HDU,” says Raghaw. Also, the policy has a rather long waiting period of 30 days for a one-year policy. Two standard covers, Kavach and Rakshak, are available. Kavach is an indemnity plan (insured is paid the bills she incurs). Rakshak is a fixed-benefit plan that is triggered if the insured is diagnosed with Covid-19 and is hospitalised for at least 72 hours. In Kavach, the sum insured goes up to Rs 5 lakh, while in Rakshak the benefit can range from Rs 50,000-2.5 lakh in multiples of Rs  50,000. Covid Shield+ offers more comprehensive protection. While the Edel­weiss policy is for one year, Kavach and Rakshak are for 9.5 months.

Who should buy? 

Those who have adequate life and health cover can avoid this policy. Peo­ple who don’t have any health insurance may consider it. “Those who can afford its slightly higher premium, compared to Kavach and Rakshak, should buy it,” says Santosh Agarwal, chief business officer–life insurance, Policybazaar.com. People who are at higher risk of contracting a severe form of Covid-19 may also go for it. “If you are 45 or above, or have ailments like diabetes and hypertension, buy this policy,” adds Agarwal.

Which policy is right for you 

• To take care of hospitalisation costs, buy a comprehensive health cover worth at least Rs 10 lakh for your nuclear family 
• To increase your hospitalisation cover, buy a super top-up 
• A term cover equal to 10-20X gross annual salary should be purchased so that the family’s financial goals don’t get jeopardised in case of the breadwinner’s early demise 
• Those who don’t have a health cover may buy a single-disease cover like Edelweiss Covid Shield+ 
• If you can’t afford any of the above options, buy the less expensive Corona Kavach (indemnity cover) and/or Rakshak (fixed-benefit cover)