Is COVID-19 covered under Health Insurance ?

In the last two weeks, the public at large from all over India has been seeking advice on Health Insurance and Term Insurance. Even Indians already in foreign countries who have an Overseas Travel Policy have asked whether it covers treatment for COVID-19 abroad, if required.

Let us take up these questions one by one .

In India, till recently, there was no Insurance Policy, specific to Covid. The reason is that health insurance covers treatments for most diseases with some exclusions for a specific period. This may also exclude some pre-existing diseases.  Therefore, it means that COVID-19 is covered, provided hospitalisation takes place for over 24 hours. 

However, now you can cushion yourself against Coronavirus disease (Covid-19) with a COVID-specific cover from godigit.com. This policy provides policyholders 100% of the Sum Assured if the patient is tested positive for COVID-19 from any of the authorised centres of ICMR-National Institute of Virology, Pune. There is no need to wait for the completion of the treatment and the claim process is indeed very simple. In case the insured is quarantined in a government or military hospital for at least 14 consecutive days, the company will pay 50% lump sum of the Sum Assured. This is applicable even if COVID-19 test is later found negative as it covers the screening and treatment costs. For exclusions, policyholders are advised to read the precise policy wordings. Religare Health has come out with a good Group policy, which can be taken by the employer for all its employees.

At present, government-run hospitals are treating COVID-19 patients without charging anything for this. In fact, a lot of effort is being made in locating potential patients and bringing them to hospitals. For treatment in a private hospital while one has a health policy, then the terms and conditions of the existing policy are valid. Those who have a policy with no room rent capping will be better off as the insured can stay in isolation in a single room. Those with room rent capping may have to use wards or shared-room facilities. The insurance company will pay all expenses towards doctors and medicines.

Our advice to those who want to buy a normal health insurance now is that a 30-day cooling-off period applies and new policyholders are not covered for illness due to COVID-19 during the first 30 days. Therefore, policyholders who now catch COVID-19 after 15 days of the policy being issued will not be covered under the policy. That means the patient will have to either be treated in a government hospital or pay out for treatment in a private hospital.

In a proactive manner, the Insurance Regulatory and Development Authority of India has instructed all the Health Insurance companies to include medical cover for COVID-19. Where hospitalisation is covered in a product, insurers are required to ensure that the cases related to COVID-19) is handled expeditiously. The costs of admissible medical expenses during the course of treatment including the treatment during quarantine period will be settled in accordance with the applicable terms and conditions of the policy contract and the extant regulatory framework. Further, all the claims reported under COVID-19 will be reviewed thoroughly by the claims review committee before repudiating the claims. We welcome this initiative of the Regulator.

Overseas Travel Policy 

An Overseas Travel Policy  covers medical treatment in a foreign country if the insured falls ill while travelling . As an NGO, our advice to those who are already in a foreign country is to travel with confidence in the foreign country while taking precautions, which even we are taking in India. Those who will be travelling in the coming weeks must travel with this policy for suitable sum. Senior Citizens (especially those above 70 years) will be in a disadvantageous position as most of the insurance companies issue policies with a sum assured of $50,000. It is advisable to take a policy with a higher sum after understanding the implications like sub-limits. The highest sum available is $5 Lakhs. Those who have symptoms of COVID-19 should not go out of India at all as India has better facilities to handle this disease.

A large number of policyholders or those intending to take a Term Insurance have been asking whether death due to COVID-19 is covered in this policy. Term insurance covers death due to any illness so COVID-19is fully covered. It Life insurance companies issue a term insurance policy and, in most cases, they get the forms filled up, call for medical examination and do judicious underwriting. The Policy is issued when the insurance company is fully satisfied that proposer is healthy and, of course, is not suffering from COVID-19.

People are advised to buy a Term Insurance plan to protect their families in the event of death due to Covid-19 or any other disease / accident. This is especially true in the light of the fact that those above the age of 60 years face a higher risk from COVID-19. Many insurance companies issue term insurance policies up to 69 years (below 70 years). Indications are that from 1 April 2020, the premium rates may increase by 15 per cent. Therefore, the right time to buy this policy is before 1 April.

Loss of Profit Policy 

Another policy that business owners buy is the Loss of Profit Policy. Many Business owners are showing interest in buying this insurance policy to cover losses due to loss of business due to restrictions being imposed in running multiplexes,  gyms, swimming pools, theatres, banquet halls, organising conferences  for certain period.

Even when not closed there is big downfall of customers in hotels, restaurants, airlines, toll plazas, shops, malls, parking lots due to precautions being taken by people by staying indoors. This existing policy will not cover business reduction or losses in profit. This policy claim is valid when a loss has occurred due to a fire or some accident and claims have been lodged for it.

Therefore Loss of Profit Policy will not permit you to lodge a claim due to COVID-19. If a business owner is interested in buying this policy then he should buy but not with understanding that claim will be lodged for COVID-19. The Confederation of All India Traders has come out with demand for suitable Insurance policy for reduced level of business. We feel coming out with such policy in a short time may not be possible as global pandemic is on and no insurance or reinsurance company will like to enter with a product at this time.

COVID-19, with its epicentre in Wuhan in China, has spread to over 147 countries in under two months. Across the globe, there are 1,48,306 confirmed cases, 5,550 reported deaths, with India reporting over 130 confirmed cases, underlining the urgent need for Health Insurance. Insurers across the world are scrambling to develop a COVID-19 specific product, but it could take some time. In the absence of a COVID-19 specific insurance product, industry experts have underlined the need to get oneself covered by the above four insurance policies.