Page 28 - Insurance Times December 2020

9. It excludes unproven treatment expenses as it lack The details of frequency and severity of corona virus
significant medical documentation to support its treatments, the effect of including otherwise excluded cost
effectiveness. However it stipulates that treatment in existing products, evolving treatment protocol and costs
authorized by the government for the treatment of remaine devolving, unknown and unsettled. Long term effect
Covid shall be covered. So the plasma therapy, if on health on corona survivors remains uncertain.Prognosis
authorized by the government will be covered and and treatment remains emerging. There remains high level
indemnified. of uncertainty related to frequency and severity of Covid
outbreaks.
10. There is no deductible under this policy.
11. Lifelong renewability, portability and migration is not These constraints resulted in discovery premium costs for
available under this policy. these standard products that vary significantly amongst
insurers. It significantly but surprisingly attracts the
12. Installment facility is not available as it is single
premium payment short term policy with policy tenure attention that the risk appetite and actuarial assumptions&
evaluations for standard risk can be so materially different
options for 31/2 months, 61/2 months and 91/2 months.
for different insurers in their rate setting process. Whether
13. Pre-hospitalization expenses incurred 15 days before these rates are representative of being competitive in their
hospitalization and post hospitalization expenses post pricing or are on factoring of all associated risk on quality
30 days of discharge are covered. data sets can honestly be best answered only by the
14. Policy has optional daily cash cover on benefit basis up actuaries or else the insurers may check later how their
to 0.5% of sum insured once every 24 hours of liabilities are reported& combined costs emerge actually for
hospitalization up to 15 days to meet incidental these limited period products against technical premiums
expenses. rated for these products.
15. Waiting period is only 15 days. Any Covid claim Some private insurers who have priced annual standard
manifested prior to commencement date of policy or Arogya Sanjeevani health insurance product at very low price
during the waiting period is not covered. in April 2020 have priced limited Corona Kavach with very
16. Policy ceases if the insured travels to any country placed high price in July 2020. Some PSUs who priced the standard
under travel restrictions by the Government. annual cover at very high price discovered very low price
for this limited product in their actuarial modelling and
Pricing of Corona Kavach Policy: evaluation of standard products. For a common man so
much difference in same standard products suggests that
The product design of the Corona Kavach is standard across these companies are at risk of under or over pricing the risk.
insurers and no changes in prescribed design are permitted. Margins do vanish in a price-based competitive world.
Its pricing, however is left for discovery independently on However, the prices are very attractive and affordable and
Insurers on their actuarial assumptions and evaluation of will surely ease the financial pressure brought by this
risk. The pricing remains a challenge for insurers due to lack pandemic.
of data or availability of insufficient data related to cost of
Covid treatment, related morbidity rates, mortality rates & The pandemic will run its course at some point of time and
patient profiles. the need which is felt today may not remain so relevant
after a year or two. The trend of shoot up sale of this limited
period product is out of fear and panic and it may last only
for a short term. The revenue generated on these products
may not remain available for renewals once the virus is
contained and controlled. These Covid products do not seem
to be a long term risk mitigation tool and these are no
substitute for a regular health insurance covering all illnesses
with lifelong renewable clause.

Corona Rakshak hands out a pre-agreed lump-sum to insured
beneficiary upon diagnosis of Covid. The policy promises to
pay up to 100% of the sum insured in a lump sum if the
insured tests positive for Covid-19 and is hospitalized for a
minimum of 72 hours. The policy is terminated once claim
The Insurance Times, December 2020