How covid-specific policies have  fared  since their  launch

“Covid insurance has seen a full cycle since its launch. Initially, in March and April last year, several group products were being launched and frequently repriced. Once the regulator set the standard for Corona Rakshak and Corona Kavach (from June) the products were standardized although there were large price differences among insurers,” said Chandan D.S. Dang, executive director, SecureNow.in

THE RISE

The covid-specific health policies—Corona Kavach and Corona Rakshak—bailed people out in an unprecedented situation as no existing term life or health policy insurance covered the ailment. “These covid-specific policies were very much in demand during phase 1 and 2 of the lockdowns. Many people bought these as a top-up to existing health insurances,” said Dang.

According to Irdai data, there was a 15% growth in Corona Kavach policy sales and most investors were buying the policy for a period of 9.5 months last year. Between July and August, more than 1.5 million lives were covered under both the covid-specific policies.

“In many ways, covid-specific policies were the first example of ‘sachet marketing’ of health insurance policies. There wasn’t too much advertising about these policies, yet, as you can see, the take up was amazing. Within two months of launch, these policies were selling as much as regular health policies,” said Girish Rao, chairman and managing director, Vidal Health.

“The fear of covid was the biggest factor in the soaring demand for such specific policies as there was no vaccine and there was a humongous uncertainty about lives. Moreover, private hospitals were charging exorbitantly for the treatment of covid, hence, people wanted to be assured about their finances in case they caught the virus,” said Naval Goel, founder and chief executive officer, PolicyX.com.

“Another factor that determined the demand was the way packages of these policies were designed such as coverage of complete hospitalization expenses or home care treatment expenses, a wide age eligibility range, limited policy tenure. These relaxed criteria urged people to buy covid-specific policies with a minimum burden,” Goel added.

THE FALL

Covid has been a catalyst for insurance demand and has made people buy more covid-specific policies. However, the sudden drop in covid-specific policies from October onwards reflects the steep drop in coronavirus cases. The more interesting trend is to see how regular health policies continued to grow month on month even when corona policies tapered off (see chart).

“People have taken a more relaxed approach towards the virus as they have realized that this can be cured at home and they need not necessarily be admitted in a hospital for treatment. Also, the vaccination drive has boosted the confidence in people to combat this ailment,” said Goel.

Alongside, Irdai has issued strict guidelines to insurers to include covid treatment in a regular health insurance policy, so that people don’t have to buy an extra policy for covid.

Amit Chhabra, head-health insurance, Policybazaar.com, said post-October 2020, as the number of positive cases started to decline in various states, the fear of covid diminished and the number of queries also went down.

“We have also seen cases where people have ported their covid-specific policy to comprehensive health covers. People are also going for high sum-insured comprehensive covers and creating a protection net around themselves and their family members,” Chhabra said.

Besides, the regulator has now standardized health insurance products that are easy to understand. All standardized regular health insurance policies cover the treatment cost of covid. Therefore, one should ideally go for a regular health policy instead of buying a covid-specific one. These standardized regular health policies are good value for money and cover all types of ailments. However, one should check and compare the premium rates before zeroing in on a regular health policy. Rao said, “These retail health policies have been growing year-on-year at 12-15% and the prime drivers of this growth have been private health insurers.”