Fixed-benefit plan helps cover costs that standard health policy does not cover

I am 39 years old and have a floating family health insurance policy that covers me and my wife. Given the recent covid-19 crisis, I am thinking of taking out health insurance specific to this disease. I want to know what coverage should I expect and the terms and conditions associated with the coverage.

—Name withheld on request

Two types of plans are currently offered by insurance companies for covid-19. These can be categorized into compensation plans and defined benefit plans. Indemnity plans reimburse expenses incurred within the limits of the policy. Defined benefit plans pay out a specified amount when the agreed trigger is reached. The standard health insurance plan is an indemnity plan. If you buy an indemnity-based covid-19 plan, you can claim expenses in your existing policy or in the new plan, but not both. However, if you use up the sum insured in one plan, you can claim the balance from the other plan. In the defined benefit plan, you will receive a lump sum, regardless of the actual costs incurred. You can still make a claim under your floating family health insurance plan.

In indemnity plans, you should check the initial waiting period, coverage for comorbid conditions, and home care. A large proportion of covid-19 cases are now treated at home, with doctors and nurses visiting the patient. Most health insurance plans do not cover this home care for covid-19. Thus, thanks to the plan specific to covid-19, you could fill this gap.

Recently, the Insurance Regulatory and Development Authority of India (Irdai) had asked insurers to offer short-term covid-19 compensation plans (Corona Kavach). These would be available for terms of 3.5 months, 6.5 months and 9.5 months. These plans would have a 15-day waiting period and cover home care. Coverage will be standard for all insurers. You can also evaluate these plans.

In the defined benefit plan, you need to check the waiting period and the condition for triggering the claim. For some diets, a simple positive lab report is sufficient. Other plans may require hospitalization. Defined benefit plans are more suitable for you because you already have a health insurance plan. The payment from the defined benefit plan will help you cover expenses not eligible under regular health insurance.

All plans require the test to be performed by a government-approved lab. These also exclude coverage if you had a recent history of overseas travel. Some plans exclude coverage if you were cohabiting with a covid-19 patient.

Abhishek Bondia is Senior Director and Managing Director of Queries and views to [email protected]

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