Will Your Health Insurance Policy Cover Coronavirus Infections? Know Here…

Mar 14, 2020

The early detection of Novel Coronavirus or COVID-19 that appeared in Wuhan, Hubei, China in the month of December 2019, has cast its ugly spell world over.

Two months ago my brother called to inform me about coronavirus doing the rounds. I had been planning for my long-awaited holiday trip abroad, scheduled this month, but he advised me to cancel my trip for safety reasons.

Within a span of four months since the first reporting, cases of coronavirus have spread rapidly like a wild forest fire, which refuses to stop and is consuming every region of the world. Till March 10, 2020, World Health Organisation (WHO) reported 113 702 confirmed positive cases and 4012 deaths globally.

In India, WHO reported 44 cases. The Indian government has asked all the citizens to follow certain practices in order to prevent spreading of the virus. However, even if anyone is diagnosed with it, the person will have to undergo quarantine to prevent further infection and control of it. So far, no vaccine is available for it.

For a person catching this infectious disease, the chances of recovery are high, but it will come at higher costs. So the Insurance Regulatory and Development Authority of India (IRDAI) has issued a circular to all insurers on guidelines on handling of claims reported under coronavirus.

As per the circular, since coronavirus will require hospitalisation, it shall be handled as per the following norms. These instructions are issued under the provisions of Section 14 (2) (e) of IRDA Act, 1999 and shall come in to force with immediate effect.

  • Where hospitalization is covered in a product, insurers shall ensure that the cases related to Corona virus disease (COVID-19) shall be expeditiously handled.

  • The costs of admissible medical expenses during the course of treatment including the treatment during quarantine period shall be settled in accordance to the applicable terms and conditions of policy contract and the extant regulatory framework.

  • All the claims reported under COVID 19 shall be thoroughly reviewed by the claims review committee before repudiating the claims.

Image by Gerd Altmann from Pixabay
 

Further to help the policyholders, the circular mentioned that in order to provide need-based health insurance coverage, insurers are introducing products for various specific diseases including vector borne diseases. For the purpose of meeting health insurance requirements of various sections, insurers are advised to design products covering the costs of treatment for Corona Virus.

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After this circular was made public, on March 4, 2020, several senior executives made statements to news channels, including Mr Subramanyam Brahmajoysula, SBI General Insurance Head-Underwriting and Reinsurance said, "Claims due to coronavirus are payable, provided the person concerned is hospitalised for at least 24 hours. Most of the health insurance policies in India do not cover outpatient treatment. However, if coronavirus is declared a pandemic by the WHO or the Indian government, claims might not be payable as such claims are excluded under many health insurance policies."

And today, while I am writing about this, WHO has characterised COVID-19 as a pandemic.

WHO Director-General in his regular media briefing stated that WHO has been assessing this outbreak around the clock and we are deeply concerned both by the alarming levels of spread and severity, and by the alarming levels of inaction. WHO therefore have made the assessment that COVID-19 can be characterized as a pandemic.

A pandemic is a disease epidemic that has spread across a large region, for instance multiple continents or worldwide. And current reports state there are more than 118,000 cases in 114 countries, and 4,291 people have lost their lives globally. In India it has breached 60 cases as on March 11, 2020, reported by WHO.

So, with regards to insurance claims, related to COVID-19, as of now the IRDAI circular stands, until no new update has been given. Demographically, India, is one of the most populous countries in the world after China, so we need to wait and watch, to know the severity of it within our country.

Remember, insurance is a tool purely for Risk Management and is an integral aspect in the exercise of financial planning and must be undertaken with utmost care. Buying insurance is a continuous activity. Every individual's needs change over a period of time. This in turn necessitates a review of your insurance requirement.

Remember, financial and health security are the basic tenets for an individual; the purpose of insurance is indemnification of risk from an untoward event. However, as far as wealth management is concerned, it is best to keep insurance and investment needs separate.

No matter how young you are, don't procrastinate about taking an optimal life insurance cover, as no one can foretell when life will change its course.

"Perhaps the best cure for the fear of death is to reflect that life has a beginning as well as an end."   - William Hazlitt.

 

Warm Regards,
Aditi Murkute
Senior Writer




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