How to insure your health during Coronavirus pandemic in India

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INTRODUCTION

When it comes to the COVID-19 pandemic that has infected over 5 million people across 215 countries, every day is a learning day – and that is because we scan the news for maximum information, we are all learning a great deal about how the virus behaves under different conditions, measures being taken to control the spread of the virus and how scientists continue to search for new drugs and vaccines.

However, as investors, we have lessons to learn too – about how the stock markets and assets react under extreme conditions like Coronavirus outbreak, and how we should build our investment portfolios to be more robust in the future, providing the investment growth we all crave for. There are a plethora of key investment lessons that can be learned and if we decide to take them on board, we could come out of the lockdown with better money making skills.

 

 

‘PROTECTION’ – The Foundation of a Resilient, Long-term Financial Portfolio

Protection is one of the finest ways to mitigate the potential risks and challenges that may come across your financial portfolio. There is enough circumstantial reference that showcases that the damage done due to unforeseen health expenses or loss of income due to the unexpected death of the family’s breadwinner is significantly high. Apart from leaving a major dent in the family’s savings, lack of protection can leave you and your family grappling with undue stress of day-to-day living apart from coping with stress or tragedy. It is very important to include protection products in our investment portfolio in order to help our loved ones to retain their lifestyle and long-term financial goals even in our absence. Though it is advised that one must include protection plans in their investment portfolio at the beginning of the professional career as ‘the sooner you buy the lesser you pay for premiums’.

 

HEALTH INSURANCE

 

To deal with ongoing coronavirus pandemic-which has become a common affair in the last few decades, it is best advised to cover us and our family under a comprehensive health insurance policy. God forbid, in case one or his/her family member gets infected by the novel coronavirus, they must have a comprehensive health insurance plan to pay for the hospitalisation expenses.

It is important for everyone to know any claim due to coronavirus will be payable by the insurer if a person is hospitalized for at least 24 hours. Every basic health insurance plan will compensate the policyholder for expenses incurred on pre-hospitalization, post-hospitalization, in-patient treatment, OPD and ambulance expenses should one seek treatment for COVID-19 infection. However, while buying health insurance, it is important to have an adequate sum insured as treatment of such pandemics is quite costly and one must have sufficient coverage to pay for the expenses. For a family of three, with 2 Adults and 1 Kid, 1 crore sum insured health plan can be bought at Rs. 17,000 – 18,000 annual premium.

 

TERM LIFE COVER

The uncertainty and unpredictability of events like COVID-19 pandemic in life give utmost importance to buying term life insurance plan. A term life insurance plan not only protects the family members from the unexpected vagaries of life and financial disasters due to instances such as accidents and critical illnesses but also gives them financial stability from the eventuality of the unexpected death of the breadwinner of the family. Term life insurance plan is one of the most efficient ways to protect the family from financial instability. Under a term life insurance plan, the dependents of the policyholder are paid the entire sum assured in case of death of the policyholder within the policy tenure. The amount received by the dependents helps them to tide over any financial crunch.

A term life insurance plan is the only kind of insurance product that offers the maximum protection for the lowest cost. Moreover, now one can cover his/her life up to the age of 99+ years which was not possible to do till a few years back. For a 35-year-old individual, a term plan can be bought for Rs. 12,000 – 18,000 for a policy term of 70 years with Rs. 1 crore sum assured.

 

‘WEALTH CREATION’ – Important for Goal-Based Financial Planning

While most health insurance policies in India are providing cover for the coronavirus infection, the person may not be able to get a claim for its treatment in the following scenarios.

The claim will also be limited by the maximum sum insured by the health insurance policy.

1. If the patient is not hospitalized for at least 24 hours

Health insurance claim due to coronavirus will be payable only if the patient is hospitalized for at least 24 hours. However, if he/she is not hospitalized, then his/her policy may not cover the claim as most of the indemnity type health insurance policies (mediclaim) in India do not cover outpatient treatment.

Shreeraj Deshpande, COO, Future General India Insurance said, “Any person who is hospitalised as a result of coronavirus and takes treatment will be covered as any other illness. The subsequent claims will be processed as per regular norms, provided the individual has been hospitalised for at least 24 hours.”

2. If the disease is declared as epidemic/pandemic

The insurer might not settle a claim under the health insurance policy if the disease is declared as an epidemic or pandemic by the World Health Organization (WHO).

Subramanyam Brahmajoysula, Head – Underwriting and Reinsurance, SBI General Insurance said, “If coronavirus is declared as a pandemic by the WHO or Indian government, or both, then claims might not be payable as such claims are excluded under many health insurance policies.”

However, Pankaj Verma, Head – Market Underwriting Operation, SBI General Insurance, said, “Our standard health policy is capable to take care of coronavirus coverage. ” He adds, “On the claims front, we comprehend that Covid-19 is a disease of epidemic proportions and will have deeper impact on people’s lives, we are trying to provide all the help. SBI General is not rejecting any claim without minimum compliance of regulatory requirements as prescribed.”

Hence, instead of panicking, one should ask one’s health insurer whether their policy covers the coronavirus disease. Amit Chhabra, Head- Health Insurance, Policybazaar.com said, “Not all, but most of the health insurance policies cover such epidemics/pandemics. However, it majorly depends upon the policy. Very few policies have clauses of not covering epidemics/pandemics. You must read the policy document and contact your health insurer immediately.”

 

3. If you are going for a planned treatment

Over the past four weeks, if the person has been suffering from any respiratory-related disease, then his/her claims under a regular indemnity type health insurance policy or a specific coronavirus insurance policy might not get settled. For instance, if the person have been suffering from severe cough, respiratory diseases, breathlessness, flu over the past few days and he/she plan to take treatment for it, his/her policy might not cover even if it results in symptoms for coronavirus disease/infection.

Chhabra said that the symptoms of coronavirus are quite similar to the common flu as it affects the upper respiratory body. “However, if you already have coronavirus disease/infection and you are thinking of buying a health insurance policy and want to get the claims settled then probably your claims will not get paid under the newly bought regular health insurance or coronavirus insurance policy,” he said.

Hence, any previously planned treatment (planned before purchasing policy) under a newly purchased health insurance/coronavirus insurance policy is not covered.

Sanjiv Bajaj, Vice Chairman and MD, Bajaj Capital said, “If it’s an emergency outbreak in the country, any which ways the disease shall be covered under a health insurance policy, however, if it is a planned treatment, it shall not be covered.” 

 

4. If you contract the disease within the policy waiting period

The insured will not get claim filed for treatment of a disease within the policy waiting period of a health insurance policy if the disease treatment is excluded within the waiting period. Typically, most policies exclude several kinds of treatment in the waiting period of the policy.

A waiting period is a pre-fixed time period starting from the date of purchase of the policy. Coverage of many diseases starts only after this waiting period is over in most health insurance policies.

The special coronavirus insurance policy launched by insurer, Digit, also has a waiting period of 15 days. This means that if the patient is diagnosed with the coronavirus disease/infection within this waiting period, his/her policy will not cover it. In such a case, the claims will not get settled for this disease by the insurer.

Mayank Bathwal, CEO, Aditya Birla Health Insurance said, “The general waiting for covering respiratory diseases is 30 days unless you had a pre-existing condition for the same.”

 

5. You or family member recently travelled to affected countries

In the case of health insurance policy, Bathwal said, “If you are travelling from a coronavirus affected country and diagnosed positive, you will be covered under regular indemnity health insurance policy as long as you are being quarantined in India.”

However, the special coronavirus insurance policy does not cover people who have travelled to coronavirus affected countries such as China, Hong Kong, Macau, Taiwan, Italy, Kuwait, Japan, Singapore, South Korea, Thailand, etc.

Vivek Chaturvedi, Head – Marketing and Direct Sales Online, Digit Insurance, referring to the special coronavirus insurance policy, said, “Your claim will not get settled even if you contract the disease/infection from a family member who has travelled to these places/countries.”

 

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