Who should buy a Corona Rakshak health insurance policy?

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While both of these products target covid-19 claims, Rakshak has not been made mandatory by the Insurance Regulatory and Development Authority of India (Irdai), meaning insurers can decide whether they wish to offer the product or not.

With two standard policies for covid-19, you may have a hard time choosing which one is right for your needs. Read on to find out if you should opt for the Corona Rakshak policy

What does Corona Rakshak offer?

Like Corona Kavach, Corona Rakshak also offers three contract terms: 105, 195 and 285 days. The minimum entry age is 18 and the maximum is 65 and there is a 15 day waiting period. You can opt for a sum insured between ??50,000 and ??2.5 lakh in multiples of ??50,000.

The policy will pay 100% of the sum insured if the policyholder is hospitalized for 72 hours on a positive diagnosis for covid-19 from a government-approved diagnostic center. For example, if you opt for a ??2.5 lakh sum insured, in the event of hospitalization for covid-19 for three days, you will receive a lump sum of ??2.5 lakh.

Once 100% of the sum insured is paid, the policy ends. The policy is available on an individual basis only and does not have the floating option.

Unlike regular health insurance plans, the Corona Rakshak policy cannot be renewed. You also don’t have the option to migrate or transfer the policy from one insurer to another.

How do the premiums compare?

You already have less choice here because only a few insurers offer Corona Rakshak. Based on the fee schedule shared by insurers, we found that Rakshak Future Generali India Insurance Co Ltd policy premiums are on the low end of the spectrum compared to Star Health and Allied Insurance Co. Ltd.

For a person aged 31 to 35 with an insured capital of ??2.5 lakh, which is the upper limit, the policy of Future Generali costs ??321 for a period of 3.5 months and ??512 for a period of 9.5 months. For an individual aged 61-65, the same product costs ??880 and ??2,189 for 3.5 and 9.5 months, respectively. However, Star Health has priced the policy at ??3,846 for 3.5 months and ??5,192 for 9.5 months, regardless of your age group. Prices exclude taxes.

“The infection rate is only increasing and if we test positive we will have to pay the full sum insured. We can be hospitalized even for mild symptoms and once that happens we will have to settle the claim. The fact that we are a stand-alone health insurer means that we will have more claims to come. We have priced the product taking all of these aspects into account, ”said S. Prakash, Managing Director of Star Health and Allied Insurance.

Note that depending on pre-existing illnesses and comorbidities, the insurer may choose to charge the premium or choose not to sell you the policy.

Should we buy?

Understand that it may not be fair to compare the Corona Kavach with the Corona Rakshak policy, as the two products serve different purposes. While the Kavach (Indemnity) policy will pay for your hospital costs, the Rakshak (Defined Benefit) policy is an income replacement.

Mahavir Chopra, founder of Beshak.org, an independent research platform for insurance buyers, said people who have a policy with a lower sum insured or with room rent limits might consider the Corona policy. Kavach. Sub-limits could result in proportional deductions while the Kavach policy has no sub-limits. “If you have pre-existing conditions and are lucky enough to have a policy, this could work in your favor as you will be covered after only a 15 day waiting period,” he said.

Corona Rakshak might be right for you if you already have a health insurance policy but believe a positive diagnosis for covid-19 could result in lost earnings. “It works for people who are looking for an income replacement due to hospitalization. In addition, any deduction that occurs on the health insurance claim can be supplemented by this benefit-based policy. In regular health policies, PPE (personal protective equipment) and other consumables may sometimes not be covered. This is where Rakshak could help, ”added Mahavir.

If you already have adequate health insurance, opting for Corona Rakshak is a good idea for income replacement, as premiums are only around 1-2% of the sum insured in the case of most insurers. But it’s important to note that you must be hospitalized for 72 hours to be eligible for a claim.

Naval Goel, CEO and Founder of PolicyX, an online insurance aggregator, said if you have a regular indemnity policy you should buy Corona Rakshak to get the benefits of the fixed cost or if you are the sole backer of household family. “Remember, most insurance policies cover the coronavirus. If you don’t have health insurance coverage, you should consider purchasing the Corona Kavach policy. Corona Rakshak is ideal if your hospitalization could have an impact on the financial situation of the household. It is an income replacement plan. ”

Chopra said that from an insured’s perspective, a 72-hour hospital stay is reasonable. The only thing that one needs to compare are the premiums as the product is standard among insurers, but the cost can vary widely. Also, keep in mind that in the case of people with underlying conditions, purchasing these policies may not be easy, but if you are already covered by a health insurance plan, it is not. There is not too much to worry about as all regular health insurance plans cover covid19.

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