Covid fear: Indians spent Rs 864 crore on Corona insurance in six months

With the deadly coronavirus infecting over 10 million people and killing over 1 lakh people in India, people have rushed towards Covid insurance policies like Corona Kavach and Corona Rakshak investing a total of Rs 864 crore in them.

New Delhi: The fear of infection of novel coronavirus, which has killed nearly 2 million people worldwide, and heavy treatment cost that may include treatment in an intensive care unit in a specialised hospital, prompted over two million Indians to shell out Rs 865 crore in buying Covid specific policies like Corona Kavach and Corona Rakshak during April-September period last year, said a RBI report.

It amounts to spending an average of Rs 3,600 per policy as these 23.75 lakh Covid medical insurance policies covered over 1.1 crore Indians.

Given the uncertainty over how the global pandemic will unfold, India’s insurance sector regulator - Insurance Regulatory and Development Authority of India (IRDAI) – last year made it mandatory for general and health insurance companies to launch Corona specific insurance products.

The highly contagious virus has infected over 10 million people in the country and killed over 1,51,000 people so far.

Corona Kavach, Corona Rakshak

There are two Corona specific policies, Corona Kavach and Corona Rakshak, in addition to other Covid related medical insurance products.

According to the data compiled by the Reserve Bank of India, Corona Kavach got the lion’s share of Covid specific policies bought by individuals.

Out of 23.75 lakh Covid policies sold to the customers between April-September 2020, Corona Kavach accounted for 19.58 lakh (82.43%) policies, Corna Rakshak for 3.8 lakh (16%) and other Covid policies accounted for some 37,000 policies (0.015%).

Corona Kavach covers hospitalisation, pre-post hospitalisation, home care treatment expenses and also the treatment recommended by India’s Ayush ministry.

Over 1.1 crore Indians get Corona insurance cover

These policies covered over 1.1 crore Indians for a total sum of over Rs 12.9 lakh crore but the number of senior citizens was less than their share in the country’s population.

Senior citizens, over the age of 60 years, accounted for just 7% lives covered under the Corona Kavach and just 4% under Corona Rakshak against the 8% share they had in the country’s population of 1.36 billion people in 2019, according to a UN report.

According to the data compiled in the RBI's financial stability report released this week, over 19.58 lakh Corona Kavach policies covered over 32.86 lakh people for an amount of Rs 1.12 lakh crore at a gross premium of Rs 469.66 crore.

Similarly, over 3.8 lakh Corona Rakshak policies covered nearly 4.43 lakh people for a sum of Rs 7,481 crores at a gross premium of Rs 57 crores.

However, other Covid specific products, most often group insurance products, amounted for the biggest coverage as just 36,954 policies covered over 73 lakh lives for an amount of nearly Rs 11.8 lakh crore at a gross premium of Rs 864.81 crore.

(Article by Krishnanand Tripathi)