Standard covid product to be benefit-based cover under revised IRDAI rules


The insurance regulator, Insurance Regulatory and Development Authority (IRDAI), has revised the guidelines for a standard covid product from the earlier draft guidelines issued by it. In a fresh draft, the regulator asked general insurance companies and standalone health to offer a “standard benefit based product” rather than an indemnity based health product which was proposed earlier.

The standard benefit based product will offer a lump sum benefit equal to 100 per cent of the sum insured which will be paid by the if an insured tests positive novel (Covid-19), resulting in hospitalisation. “The diagnosis has to be confirmed by authorized centers as declared by the Ministry of Health and Family Welfare, Government of India”, said the draft guidelines reviewed by Business Standard.

The minimum sum assured for the product will be Rs 50,000 and it can go upto a maximum of Rs 5 lakh. A General Insurance Council official said that these were still draft guidelines and were still being worked on. He said that the guidelines would only be finalised next week.

Earlier, the regulator had said had to offer the standard covid product by June 15, but now the date has been pushed to June 30 because of the modifications made by the regulator.

The cover will have quarantine cover as the only add on cover, the premium for which will be specified separately so as to enable policyholders pick, choose and pay based on the need. If the insured person is quarantined due to suspected infection of Covid-19 then 50 per cent of base sum insured has to be paid by the insurer.

“The total amount payable in respect of the base cover and add-on cover mentioned above, shall not exceed 100 per cent of the sum insured during a policy period”, the draft guidelines said.

There will be a 15-day waiting period wherein the insurer shall not be liable for any claim arising for Covid-19 within 15 days from the first policy commencement date. The product, however, will not provide coverage if testing is done at a diagnostic center, which is not authorized by the government. Home quarantine will not be covered under the policy.

The standard benefit based covid cover will be for a period of one year and shall be offered on a family floater basis also.

Moreover, all modes of payment will be allowed for this product such as quarterly, monthly, half yearly and yearly. For yearly payments, a grace period of 30 days will be allowed, while for other modes, a grace period of 15 days will be allowed.

The policy tenure of the standard Covid-19 product (benefit based) shall be for a period of one year. The minimum entry age shall be 18 years and the maximum shall be 65. Despite being a standard product, the insurers will be free to price it according their own assessment.

Insurers had earlier expressed that all existing health products cover covid19 hospitalisation costs as of now and many have are also offering specific covid products but the idea behind this product is to bring a standard product for policyholders who will get a clear sense of what is covered and what is not. The idea is to have a Covid-only product that has some extra elements normally not there in a typical health policy, like quarantine add-on cover

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