India's short-term COVID-related insurance plans to push policy uptake

More people are likely to buy plans as COVID-related costs became more known.

Short-term health insurance plans specifically targeted to cover the costs of COVID-19 treatments are set to encouraged more insurance uptake in India, reports data and analytics company GlobalData.

‘Corona Kavach’ plans, which first became available in July, covers hospitalization expenses, home care treatment and ambulance charges, although claims can only be made after testing positive for coronavirus.

Adults aged 18–65 years of age may apply for the plan, with a policy length set at 3.5 months, 6.5 months or 9.5 months, inclusive of the 15-day waiting period.

The plan is expected to provide an alternative to other private healthcare insurance solutions–namely, standard Mediclaim plans and comprehensive private healthcare insurance policies, noted GlobalData.

“Corona Kavach plans have appealed the most to younger adults given their affordability, coupled with the lower uptake of health insurance policies than other cohorts of the population,” noted Beatriz Benito, senior insurance analyst at GlobalData. “An advantage of Corona Kavach policies is simplification, with IRDAI dictating that these plans offer uniform features, terms and conditions among different insurers.”

Data from GlobalData’s 2019 Global Banking and Payments Survey in January revealed that Private health insurance uptake in India is relatively high, with 78% of respondents in the country indicating that they had private health insurance in place in 2019, according to data from GlobalData’s 2019 global banking and payments survey released in January.

Uptake is highest among those aged between 25 and 54 but lowest among those in the 18–24-year-old cohort.

As the pandemic continues to spread and given the rise in fatality rates in India, health insurance products are expected to become more in-demand amongst the public.

“Awareness of the treatment costs related to COVID-19 will further contribute to a greater uptake and will encourage younger adults to take out a health insurance policy for the first time. In addition, the pandemic is expected to shape customers’ attitudes towards private health insurance,” concluded Benito.