Renewed interest in covid-specific insurance plans with surge in infections
Evaluate your overall insurance coverage using the covid pandemic as a trigger. This is a good time to determine if you have adequate insurance for your health and life, including for severe covid cases with prolonged hospitalization and treatment in an intensive care unit. A surge in COVID-19 cases in neighboring countries has raised concerns about masks, vaccines and coronavirus insurance plans. One of the reasons for the low utilization of insurance services is that insurance is often viewed as covering events that are unlikely to happen in the future.
However, the COVID-19 fight plan takes this perception into account. The fact that most households have at least one person with COVID-19 makes this case more likely. And, as was the case with previous virus waves, when cases rose rapidly, the risk of contracting Covid is inevitable. For this reason, people are more interested in getting COVID-19 insurance as a way to hedge their risk.
Over the past three years, insurers have launched several types of COVID-19 insurance plans in response to the urgent need for coverage. On the individual side, regulators have introduced two standardized schemes: “Corona Kavach” and “Corona Rakshak”. `Corona Kavach` is an indemnity plan that reimburses expenses related to hospitalization and at-home care, while `Corona Rakshak` is a fixed benefit plan that pays a lump sum if hospitalization lasts for a certain number of days. Insurers were hesitant to offer `Corona Rakshak` but saw a strong demand for `Corona Kavach`. On the group side, employers provided covid-specific death coverage to their employees, in addition to their existing group term life insurance.
Some companies also offered a covid-specific top-up plan, which employees could use after exhausting their base group health plan coverage. Additionally, a few e-commerce platforms offered a fixed benefit version of the covid health plan, where a lump sum payment was made simply upon diagnosis of the illness.
Advantages of covid-specific insurance plans
The main advantage of covid-specific insurance plans is their low cost compared to comprehensive health insurance plans. This makes it easy to budget for the coverage. Additionally, these plans are not seen as an annual recurring cost, as they are targeted at a more immediate concern. For companies, this can be a relief as they can draw on contingency funds without affecting their annual budgets. A third advantage of covid-specific plans is that some of them offer additional coverage not found in standard health insurance plans, such as at-home treatment and no room rent limits. This can greatly expand your reach.
Disadvantages of covid insurance plans
One of the major downsides of COVID-19 insurance plans is that they are not cost-effective. Absolute costs may be low, but coverage is limited to one condition only. Typically, the cost of purchasing multiple health plans for a particular condition exceeds the cost of one comprehensive health plan because distribution and administrative costs overlap.
Another problem with covid specific plans is that they can give people a false sense of security. Covid is just one of many infections, and some health claims have been rejected because the patient had a different severe viral illness. Additionally, covid has been known to compromise the immune system, leading to other severe illnesses such as heart attacks months after the initial infection, which may not be covered under a covid-specific plan. Finally, covid-specific plans are not portable, meaning the time spent in a covid plan cannot be applied towards the waiting period of a standard health plan.
There has been a recent increase in inquiries about covid-specific insurance plans, but insurers have not yet rushed to launch new plans. I recommend using the covid pandemic as a trigger to evaluate your overall insurance coverage. This is a good time to determine if you have adequate insurance for your health and life, including for severe covid cases with prolonged hospitalization and treatment in an intensive care unit.
If you do not have private health insurance, it may be time to consider getting one. In addition to COVID-19, there are several disease-specific plans, including dengue fever, cancer, and more. These plans are best viewed as a supplement to the basic comprehensive plan, not as a replacement.