Corona Kavach Insurance policy: do you have enough insurance? Here’s what you need to do to prepare for the coronavirus in 2021


ET Wealth has reached out to experts to find out how investors can protect their finances from the volatility that has raged in 2020 and the uncertainty looming on the horizon. This week’s cover story explains 11 Steps One Should Take Right Now to Improve Your Finances in the New Year.

Here are the smart money moves to make when reviewing your insurance policies.

Improve your family’s health coverage

Perhaps the only positive impact of Covid has been the awareness of health insurance. “According to a survey by Max Bupa, only 10% of people were interested in purchasing a health plan in the pre-Covid phase to cover new illnesses, but now 71% see it as a priority purchase,” said Bhabatosh Mishra, Underwriting Director, Products and Claims, Max Bupa. “It has also changed the outlook for aspects such as coverage for home hospitalization and PPE kits,” said Ankit Agrawal, CEO and co-founder, InsuranceDekho.

“As a general rule, one should assess risk appetite, family size, age range of family members, plan affordability and medical inflation before purchasing health coverage” , explains Sanjay Datta, Manager, Underwriting, Claims & Reinsurance, ICICI Lombard General Insurance. In case of Covid protection, consider two parameters: the size of the coverage depending on where you live, and whether it covers Covid and its specific requirements.

If you are single, young, and on a metro, buy at least a Rs 5 lakh compensation plan. If cost is a factor and you need immediate protection, go with Corona Kavach, a Covid-specific plan, but consider upgrading to a more comprehensive plan sooner. Although disease-specific plans are more affordable due to the limited risk coverage, replacing basic coverage is not advisable.

To prepare for the Covid, what to do if …

If you are in a high risk area, consider purchasing larger coverage of Rs 10-12 lakh. Even though the average hospital claim size for Covid is Rs 1.2 lakh, you may need higher coverage if the whole family is hospitalized or costs increase due to the severity of the problem. . Alternatively, you can consider purchasing a smaller base cover of Rs 3-5 lakh and a larger top-up plan of Rs 20 lakh as this will prove to be more cost effective. If affordability is a factor, you can buy Arogya Sanjeevani, which offers attractive features at a reasonable price and also covers Covid.

While most previous plans cover Covid-related hospital costs, they don’t necessarily include specific requirements like PPE kits, an oximeter, masks, ventilators, home treatments, etc. These are covered by the new post-Covid plans that have come to the market. So if you don’t have insurance, you might want to consider one of the newer plans. “But if you already have a plan, don’t try to buy another policy. Increase coverage at renewal or purchase a supplemental plan, ”says Dr. S. Prakash, MD, Star Health and Allied Insurance. You can also upgrade to a plan that covers medical needs related to Covid.

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If you have a family on a metro, make sure you have a Rs 10 lakh family floating plan, or buy a smaller basic plan and a larger recharge plan. If you are over 35, purchase a critical illness plan of at least Rs 25 lakh in addition to Covid protection.

Review your life insurance coverage

With Covid showing no signs of slowing down, it’s crucial not only to secure your life, but the lives of your loved ones as well. One way to do this is to purchase term insurance. An income replacement tool for wage earners, it ensures that if you were to die, your dependents wouldn’t have to struggle to make ends meet or meet their financial goals. So if you don’t have a term plan buy it; if you do, review it to make sure the sum is correct.

According to a Swiss Re 2019 report, India has a protection gap of 83%, which means that for every Rs 100 of insurance needed, an insured is only covered for Rs 17. So how do you decide to the optimal size of term insurance? “There are many academic methods of deciding the amount of life insurance needed and they all have their pros and cons,” says Subhasish Acharya, director of distribution, Future Generali India Life Insurance.

“You need to consider your responsibilities now as well as for the foreseeable future. The value of human life (HLV) calculations help assess future financial need based on age, earning capacity, and additional income and liabilities over time, ”says Venky Iyer, vice president Executive and Director of Distribution, Tata AIA Life Insurance.

How Much Life Insurance Do You Need?

life insurance

Since these calculations may not be easy to do, you can, as a general rule, take out coverage that is 10 to 12 times your current annual income. Given the current circumstances of Covid, you can increase this amount to 15 times annual income. A simple way to get the amount of coverage is to add up your current household expenses, any loans or debts, your future financial goals, the money your spouse or dependents are likely to need in retirement, and subtract your assets and investments from them. The number you come up with should be the term insurance you need.

If you have already purchased a plan, coverage can be improved by taking additional policies or appropriate endorsements.

“You can also opt for an increased sum insured, which increases the size of the coverage by a specific percentage from year to year. This helps control and balance inflation and ensure compound coverage every year, ”says Anil Kumar Singh, Chief Actuarial Officer, Aditya Birla Sun Life Insurance.

Also, be sure to review this coverage periodically. “With an increase in income, life coverage should grow proportionately. Therefore, it is important to review coverage, if not annually, at least once every two years, ”says Karthik Raman, CMO & Head, Products, IDBI Federal Life Insurance.


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