For now, the Insurance Regulatory and Development Authority of India (Irdai) has taken immediate measures. On 4 March, Irdai said all coronavirus-related claims shall be expeditiously handled and all expenses incurred during the course of treatment, including during the quarantine period, shall be covered by all insurers. It has also asked insurers to offer need-based health insurance plans to cover the cost of treatment for coronavirus. “A basic health insurance policy will certainly cover the medical expenses incurred on hospitalization for any viral infection, including coronavirus. However, infectious diseases are not covered for the first 30 days from the inception of the policy," said Anurag Rastogi, chief actuary and chief underwriting officer, HDFC ERGO General Insurance Co. Ltd.

However, if coronavirus is declared a pandemic, health insurance may not cover the expenses. We tell you the kind of expenses that will be covered if you do get infected, and the claims process you need to follow. Further, does it make sense to buy coronavirus-specific policies?

If it’s a pandemic

According to the World Health Organization (WHO), a pandemic is the worldwide spread of a new disease. The 2009 H1N1 flu was the last pandemic and it killed hundreds of thousands of people globally. According to WHO data, as on 8 March, over 1,05,586 people have been tested positive for coronavirus worldwide, with at least 3,584 deaths. Experts believe that if the spread continues, it could be declared a pandemic.

So will health insurers cover policyholders once Covid-19 is declared a pandemic by WHO and the government of India? “In case WHO declares Covid-19 as a pandemic and the same is ratified by the government of India, in some of the insurance plans, exclusion for global pandemic will get triggered, after which you may not get the cover," said Pankaj Verma, head, market underwriting operation, SBI General Insurance Co. Ltd.

Though there is no past history of any such situation, if it does happen, it is expected that the government would intervene. Rakesh Goyal, director, Probus Insurance, an insurtech broking company, said that as long as coronavirus is not declared a pandemic, health insurers are liable to cover the policyholders. “The moment coronavirus is declared a pandemic, policyholders who may get diagnosed with the disease will have to pay out of their pocket to cover medical expenses, as such claims are not covered under most health policies," he added.

Still, it’s advisable to check with your insurance company individually because it also depends on how the company has filed its products with the regulator. Digit Insurance, for example, said their health products do not exclude pandemics.

If you get infected

After Irdai’s circular, insurers are mandated to cover hospitalization as well as quarantine expenses if you test positive. “Insurance companies will pay admissible medical expenses even during quarantine. This does not require a separate out-patient (OPD) cover," said Anik Jain, co-founder and CEO, Symbo India Insurance Broking Ltd. Rastogi said treatment taken while in quarantine will be paid as hospitalization expenses which are covered under a regular health insurance policy.

You could also be worried about what happens if you’ve travelled abroad. Can your insurer deny the claim? Whether your claim is approved or not has nothing to do with your travel history. Insurers Mint spoke with said once someone tests positive, the claim will be processed. Verma said if one has fallen ill in India and is hospitalized, their travel history may be asked for the sake of data collection but it will have no impact on claim disbursement. This also includes travelling to a highly-affected region such as China and Italy.

Also, note that only standard health insurance or a coronavirus-specific policy will cover you in case you are infected.

“Coronavirus is nothing but a new strain of influenza virus. If you look up the global medical history, you’ll find that every 300 years or so, a new influenza virus travels from animals to humans and causes trouble. Hence, this (coronavirus-related illness) cannot be classified as a critical illness and will not be covered under a critical illness policy," said Verma.

The claims process will remain the same as in the case of any other ailment.

Need-based policy

Irdai, through its circular, has encouraged insurers to design coronavirus-specific policies. In line with this, Digit Insurance, under Irdai’s sandbox regulations, launched a defined-benefit health policy for coronavirus last week. Under this, policyholders get the full sum insured on being tested positive for the disease after which the policy terminates.

In other words, if you’ve been tested positive for coronavirus and file a claim, you’d be eligible for 100% of the sum insured. In case you’re quarantined which could lead to loss of income, you will be eligible for 50% of the sum insured.

The premium for the policy starts at ₹299 (including taxes) for a sum insured of ₹25,000. “One restriction which comes with a regular health insurance policy is that it requires 24 hours of hospitalization for you to be able to file a claim. Some policies do include OPD expenses but most products which include OPD expenses don’t have many takers because the premium is relatively higher," said Vivek Chaturvedi, head of marketing and direct (online) sales, Digit Insurance.

However, note that the policy comes with a host of terms and conditions. In order to be eligible for the claim, the insured should not have been in contact with anyone with suspected history of Covid- 19 till the end of the policy tenure.

As it’s a one-year cover, the insured person should not come in contact with such a person during the policy period. Also, the insured or their immediate family members should not have travelled to countries such as China, Japan, Singapore, Thailand, Malaysia, Hong Kong, Macau, Italy, Iran, Bahrain, Kuwait, Taiwan after 1 December 2019. Policyholders suffering from symptoms such as a cough, with or without sputum; cold or nasal block; fever with body pain and shortness of breath for the last six weeks of buying the policy will also not be eligible to get a claim.

“The product has a list of exclusions making it very specific. Consequently, it may not be a product that everyone will look forward to buying," said Goyal. A number of other general and health insurers too are planning to offer similar products for coronavirus. But if you already have a standard health insurance plan, it makes little sense to go for this product especially after the regulator has advised insurers to cover quarantine cases as well.

You could consider this product if you don’t have a health insurance policy in place and are worried about contracting the virus. However, Mint recommends going for a standard health plan first, as it would cover you for hospitalization under any condition. Many health policies also cover pre- and post-hospitalization expenses.

Shweta Jain, founder and CEO, Investography, a financial planning firm, said, “There are just too many exclusions and for a disease that’s easy to contract (coronavirus), the policy has gaps which will leave very few people eligible for the cover." Other insurers too might soon come up with similar products but it’s advisable to go through the fine print before buying.