Corona Kavach vs Corona Rakshak

Many insurance companies have rolled out their Corona Kavach and Corona Rakshak policies on the basis of guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI). These standard health insurance policies will cover the treatment cost of the coronavirus disease. These policies are issued for very short-term and was supposed to remain valid until March 31, 2021. Irdai has now allowed insurers to offer and renew these Covid-19 specific health policies up to September 30.

Currently, the policies are issued for three and half months, six and half months, and nine and half months including waiting period.

Read on to find out the difference between the Corona Kavach and the Corona Rakshak policies.

Type of policy

• The Corona Kavach policy is an indemnity-type plan where the hospital bill gets reimbursed up to the sum insured limit subject to terms and conditions.
• The Corona Rakshak policy is a benefit-based plan where 100 per cent sum insured is paid to the insured if he/she gets hospitalised as per policy terms and conditions.

Minimum hospitalisation required

• The Corona Kavach Policy will become active only when there is a hospitalisation of a minimum period of 24 hours. The actual medical expense incurred, up to a maximum of the sum insured, will be paid to the insured irrespective of the number of days he/she stays in the hospital post the first 24 hours.
• In the case of Corona Rakshak, the policy will become active only when the policyholder is hospitalised for a minimum continuous period of 72 hours.

Policy offerings

• The Corona Kavach Policy is offered as a mandatory cover by the insurer to individuals and families on an indemnity basis. Here, i.e., in an indemnity policy, the claim is paid as per the actual hospital bills.
• The Corona Rakshak is offered as an optional policy by the insurer on a benefit basis. Under a benefit-based policy, the entire sum insured is paid to the policyholder based on the policy terms and conditions.

Number of persons covered by single policy

• The Corona Kavach policy will cover both individuals and families.
• The Corona Rakshak policy will only cover individuals.

Policy coverage

• In the case of the Corona Kavach policy, the minimum sum insured is Rs 50,000 and the maximum limit is Rs 5 lakh.
• On the other hand, in the case of Corona Rakshak policy, the minimum sum insured is Rs 50,000 and the maximum is Rs 2.5 lakh.

Availability of additional benefits

• Corona Kavach policy offers a ‘Hospital daily cash’ benefit. This add-on pays 0.5 per cent of the sum insured per day subject to a maximum of 15 days during a policy period for every insured member for every completed 24 hours of hospitalisation for the treatment of Covid-19 on a positive diagnosis of the disease.
• On the other hand, since Corona Rakshak policy is a defined benefit plan, no such feature is available.

The following tables shows the difference between Corona Kavach and Corona Rakshak policy

Premium rate differs for Corona Kavach and Corona Rakshak
Although both types of policies are standard products, the policy premium will vary across all insurers. This is because insurance companies are allowed to price the product following their underwriting understanding. Naval Goel, CEO & Founder of PolicyX.com said that the premium is decided by the insurer based on their expectations of claim ratios, etc. which are based on certain assumptions. “The actuarial team of each insurer makes different assumptions and therefore, the premium rates of insurers may differ. Pricing also differs based on the quality of services offered by all insurers,” Goel added.

Here are some examples of how premium rates differ across several insurers

Source: Policybazaar.com
Premium rates for Corona Kavach and Corona Rakshak policies are exclusive of GST.

Other types of coronavirus insurance covers
Apart from the Corona Kavach policy and Corona Rakshak policy, over the past few months, several insurers have launched other coronavirus insurance covers as well. These are ‘need-based insurance’ covers filed with IRDAI under the regulator’s Sandbox Regulations. As per the IRDAI sandbox regulations, insurers are allowed to sell policies on a pilot basis for a limited period. These policies provide small coverage of between Rs 50,000 and Rs 1 lakh sum insured. For instance, the Star Novel Coronavirus Insurance policy is available under two sum insured options of Rs 21,000 and Rs 42,000 at premiums of Rs 459 plus GST and Rs 918 plus GST, respectively.

Click here to read more: Star Health’s coronavirus insurance policy: No travel history exclusions but low sum assured

As a policyholder, you should know that the insurer can withdraw these need-based products at any time in case it is found to be unviable to continue. So, if the existing coronavirus insurance policy is withdrawn, the insurer will offer a new alternate insurance policy to the insured. The insurer can alter or decide the specific exclusions of the disease for the new alternate policy. However, the insured person has the option to either go with the new alternate policy or reject the same and buy a new health policy.

Difference between Corona Kavach, Rakshak and other coronavirus policies

• The Corona Kavach and Rakshak policies have common policy wordings across insurance companies. However, in the case of other coronavirus policies, the policy wordings may differ from insurer to insurer.
• The Corona Kavach and Rakshak policies are issued for a specific period and cannot be withdrawn until March 2021, unless IRDAI allows it. However, the insurer can withdraw need-based policies anytime if it is found unviable to continue.
• The maximum and minimum sum insured in the case of Kavach and Rakshak policies are fixed. Whereas the maximum and minimum sum insured can vary for other coronavirus policies.

Policies issued by digital payment firms, financial services firms
Several digital payment firms, financial services firms have also rolled out their own coronavirus hospitalisation insurance policies in collaboration with different insurance companies. Below are some examples of these.

Also read: How PhonePe’s coronavirus insurance policy works

Also read: Should you buy Bajaj Capital’s coronavirus health policy that pays a lump sum to surviving insured?