Earlier this month, the regulator asked insurance companies to design products covering the costs of treatment for Covid-19 in the country. (File Photo)
With coronavirus (Covid-19) spreading, insurance companies are toying with the idea of launching coronavirus-specific cover as proposed by the Insurance Regulatory and Development Authority of India (IRDAI).
While insurance industry sources said most health policies cover coronavirus-related hospitalisation claims, provided hospitalisation is for more than 24 hours, there could be a case for a specific cover to tackle the disease as the World Health Organization (WHO) has declared the virus attack as a pandemic. Earlier this month, the regulator asked insurance companies to design products covering the costs of treatment for Covid-19 in the country.
“We are currently working on a new health product that will cover Covid-19 related illnesses, as per IRDAI guidelines,” said Subrata Mondal, executive vice president, IFFCO-Tokio General Insurance Co Ltd. Currently, insurers have not come out with any specific plan to cover the coronavirus anywhere in the world, including developed markets.
Pankaj Verma, head-market underwriting operation, SBI General Insurance, said: “Our standard health policy is capable to take care of corona virus coverage. As of now we are evaluating if there is any requirement for a corona specific cover. If the need arises, we will look at bringing out a specific product to address such diseases as appropriate.” However, industry sources are not ruling out changes in premium being charged on policies, if the disease spreads across India.
“IRDAI has issued instructions in early March asking companies to provide for cover to those affected by coronavirus and those who are hospitalised. So far, all insurance companies on our panel are providing cover for such claims even though it has been labelled as a pandemic,” said an official with Medi Assist Insurance TPA Pvt Ltd.
Industry sources said life insurance policies will cover claims for death caused by coronavirus. “If the life insurance policy of our customers covers death as an insured event, we will be honoring the death claims irrespective of the cause of death being coronavirus,” said Bajaj Allianz Life chief of customer service & operations Kayzad Hiramanek.
The regulator on its part is keen that insurers should settle claims, including the quarantine period as per the policy contract.
“The costs of admissible medical expenses during the course of treatment including the treatment during quarantine period has to be settled in accordance to the applicable terms and conditions of policy contract and the extant regulatory framework,” IRDAI said in its March 4 circular, while advising insurers to design products covering costs of treatment for coronavirus.
However, in cases, where policies explicitly exclude coverage for epidemics or pandemics, the insurance companies may deny providing benefits to customers. “Most policies in India do cover pandemics and epidemics,” insurance officials said.
Health insurance is one of the fastest growing segments of the industry. During FY 2017-18, insurance companies collected Rs 37,029 crore as health insurance premium registering a growth of 21.8 per cent over the previous year. Five states — Maharashtra, Tamil Nadu, Karnataka, Delhi UT and Gujarat — contributed 68 per cent of total health insurance premium, IRDAI said.