InvestorQ : Can you please throw some light on what exactly happens to my health insurance policy in the midst of the Coronavirus and whether it is covered by existing health covers?
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Can you please throw some light on what exactly happens to my health insurance policy in the midst of the Coronavirus and whether it is covered by existing health covers?

Answer
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Anu Biswas answered.
5 months ago


This is a new experience for the insurance industry since the epidemic of such magnitude has not been seen in recent times. Here is what you need to know about the same.

· IRDA has taken immediate measures and put in place the checks and balances. On 4 March, IRDA has directed all Coronavirus-related claims shall be expeditiously handled and all expenses incurred during the course of treatment, including during the quarantine period, shall be covered by all insurers.

· It has asked insurers to offer need-based health insurance plans to cover the cost of treatment for Coronavirus. A basic health insurance policy will certainly cover the medical expenses incurred on hospitalization for any viral infection, including Coronavirus. However, infectious diseases are not covered for the first 30 days from the inception of the policy.

· If Coronavirus is declared a pandemic, health insurance may not cover the expenses. Here are some specifics of such health covers and what exactly they will cover.

If it is a pandemic

According to the World Health Organization (WHO), a pandemic is the worldwide spread of a new disease. The 2009 H1N1 flu was the last pandemic and it killed hundreds of thousands of people globally. WHO has already declared the Coronavirus as a global pandemic. Will health insurers cover policyholders once Covid-19 is declared a pandemic by WHO and the government of India? “In case WHO declares Covid-19 as a pandemic and the same is ratified by the government of India, in some of the insurance plans, exclusion for global pandemic will get triggered, after which you may not get the cover. However, there is no hard and fast answer so it is best for you to check with your insurance company individually because it also depends on how the company has filed its products with the regulator. Some insurance policies clearly state that their health products do not exclude pandemics.

What if you get infected?

After IRDA’s circular, insurers are mandated to cover hospitalization as well as quarantine expenses if you test positive. Insurance companies will pay admissible medical expenses even during quarantine. This does not require a separate out-patient (OPD) cover. This will be paid as hospitalization expenses which are covered under a regular health insurance policy. You may be worried about what happens if you’ve travelled abroad. Can your insurer deny the claim? Whether your claim is approved or not has nothing to do with your travel history. Once someone tests positive, the claim will be processed. Travel history will be collected only for the sake of data collection but it will have no impact on claim disbursement. This also includes travelling to a highly-affected region such as China and Italy. Only standard health insurance or a Coronavirus-specific policy will cover you in case you are infected. The claims process remains the same as in the case of any other ailment.

What about a need-based policy

IRDA has encouraged insurers to design Coronavirus-specific policies. In line with this, Digit Insurance, under IRDA’s sandbox regulations, launched a defined-benefit health policy for Coronavirus. Under this plan, the policyholders get the full sum insured on being tested positive for the disease after which the policy terminates. If you have been tested positive for Coronavirus and file a claim, you’d be eligible for 100% of the sum insured. In case you’re quarantined which could lead to loss of income, you will be eligible for 50% of the sum insured. However, the policy comes with a host of terms and conditions. In order to be eligible for the claim, the insured should not have been in contact with anyone with suspected history of COVID-19 till the end of the policy tenure. Also, the insured or their immediate family members should not have travelled to countries such as China, Japan, Singapore, Thailand, Malaysia, Hong Kong, Macau, Italy, Iran, Bahrain, Kuwait, Taiwan after 1 December 2019. Policyholders suffering from symptoms such as a cough, with or without sputum; cold or nasal block; fever with body pain and shortness of breath for the last six weeks of buying the policy will also not be eligible to get a claim.