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

The insurance regulator has revised the guidelines for a standard Covid product, from an earlier draft. In the latest draft, it has asked general and stand-alone health insurers to offer a “standard benefit-based product” rather than an indemnity-based one already proposed.

The standard benefit-based product will provide a lump sum benefit – equal to 100 percent of the sum insured – to be paid by insurers if the client tests positive, resulting in hospitalization. “The standard has to be confirmed by authorized centers announced by the Ministry of Health and Family Welfare,” the draft of the guidelines reviewed by the Business Standard stated.

The minimum sum assured for the product will be Rs 50,000, which can increase to a maximum of Rs 5 lakh. An official of the General Insurance Council said that these are still guidelines. They will be finalized next week.

Earlier, the regulator had stated that insurers were to introduce the standard Covid product by 15 June, but due to the amendments it has now been extended to 30 June.

This will include the Quarantine cover as the only add-on, for which the premium will be specified separately so that policyholders can be selected on the basis of need. If the insured is let off due to a suspected infection, the insurer has to pay 50 percent of the sum insured.

The draft guidelines stated, “The total amount payable in respect of Aadhaar cover and add-on cover shall not exceed 100 percent of the sum assured during the policy period”

There will be a 15-day waiting period, in which the insurer will not be liable for any claim. The product, however, will not provide coverage if the test is performed at a diagnostic center that is not authorized by the government, and will not cover home quarantine.

The standard benefit-based Covid cover will be for a period of one year, and will also be offered on a family floater basis. In addition, all types of payments will be allowed such as quarterly, monthly, half-yearly and yearly. For annual payments, a grace period of 30 days will be given, and for other methods, a grace period of 15 days will be allowed.

The term of the policy of the product will be one year. The minimum entry age will be 18 years, with a maximum of 65. Inspite of being a standard product, insurers will be priced free of cost based on their own valuation.

“It is to help those who have no cover, or want to get additional cover. The price will be relatively low compared to traditional health products. Only in cases where patients have co-morbidities and need ventilators, the hospital bills are on the higher side, although not all patients require that type of treatment, ”Sanjay Dutta, head (underwriting and claims), ICICI Lombard General Insurance said.

Insurers previously called for existing health products to cover Covid-19 hospitalization costs, and many are offering specific Covid products, but now the idea is to bring a standard product to the public whether What is covered and what is not.

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