Star Health's coronavirus insurance policy: No travel history exclusions but low sum assured

The policy, Star Novel Coronavirus, will even cover those with international travel history. However, the sum assured of Rs 42, 000, that the insurance cover offers appears low, especially for someone who might have to be hospitalised.

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The policy is not open to senior citizens over 65 years of age.
Star Health and Allied Insurance has launched its Star Novel Coronavirus (nCoV) (COVID-19) Insurance Policy to provide insurance cover to individuals for medical treatment in case of coronavirus infection.

A person buying the policy would be eligible for the sum insured benefit if he/she tests positive for the novel coronavirus (COVID-19) after 16 days of purchasing the policy and needs hospitalisation. The policy, Star Novel Coronavirus, will even cover those with international travel history. However, the sum assured of Rs 42, 000, that the insurance cover offers appears low, especially for someone who might have to be hospitalised. Further, the policy is not open to senior citizens (over 65 years of age) who are in the highest risk category.
Here is a closer look at the insurance policy.

The policy framework
Type of policy: This is a 'Need-Based Insurance' cover filed with the IRDAI under the regulator's Sandbox Regulation. As per the Insurance Regulatory and Development Authority of India's (IRDAI) sandbox regulation, insurers can sell innovative products on a pilot basis for a limited period. The policy is a defined benefit policy (and not a reimbursement-type indemnity policy) as it provides a lump sum benefit to the insured person in case the insured event (in this case the coronavirus infection) happens.

If policy is withdrawn by insurer: According to the Star Novel Coronavirus Insurance Policy wordings, "The insurer may withdraw the product at any time in case it is found unviable to continue. However, the insured will be intimated three months in advance before the renewal due date." Apart from this, the insurer will have to offer a suitable alternative policy to the insured person.

Alternate provided by insurer: While offering the new alternate insurance policy to the insured person, the insurer can alter or decide the specific exclusions of the disease for the new alternate policy. The insurer does so because the new alternate policy is given in continuation after the existing coronavirus insurance policy is withdrawn by the insurer.

Option for the insured: The insured person has the option to either go with the new alternate policy or reject the same and buy a new health insurance policy, if needed.

Who and what is covered under the policy
The Star Novel Coronavirus policy will provide a lump sum payment to the insured person who has been declared positive by a government accredited test and has been hospitalised. The policy is available only to individuals between the ages of 18 years and 65 years.

Anand Roy, Managing Director, Star Health and Allied Insurance said, "The Star Novel Coronavirus Policy has been designed to cover those who test positive, whether or not they have travelled beyond the country's borders. The coronavirus cover will help provide a lump-sum payout for those affected to meet their hospitalisation expenses."

According to the policy wordings, "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. Anyone up to the age of 65 years can purchase the policy online by visiting the Star Health website or through the company's vast network of insurance agents, and without having to undergo any pre-medical screening." Added to this and more importantly, the policy does not have any international travel-related exclusions.

Roy also said that all of Star Health's regular health insurance plans cover treatment for Covid-19.

As per the policy document, one person can take only one policy in one year. The sum insured is also on an individual basis. However, dependent children can be covered from 3 months to 25 years along with any one of the parents under this policy.

This means multiple individuals can be covered under the umbrella of one policy, but the sum insured and the corresponding premium will be on a per-member basis.

Documents required at the time filing claim
Along with a duly filled and signed claim form, you have to submit the diagnostic test confirming the positive existence of the coronavirus from a government-authorised centers. You will also need to provide a copy of your Aadhaar card or any other Government-issued ID card. According to the policy document, "The insured person(s) claiming on behalf of the insured person shall submit the documents within 15 days of notification of the claim. The insurer may ask for additional information related to medical records and any other information/documents if required.

Limitations of the policy
The policy has an initial waiting period of 16 days. This means that you cannot claim insurance if you are diagnosed with the disease within 16 days of purchasing the policy. Apart from this, the insurer will not make any payment under the following circumstances:

  • If there is no In-patient Hospitalisation irrespective of whether quarantined or not.
  • For any illness, sickness or disease other than Novel Coronavirus (nCoV) (COVID-19);
  • Any claim for Novel Coronavirus (nCoV) (COVID-19) contracted or manifested or the onset of diseases is before the commencement date of this policy or during the waiting period.

Further, the insurer will only pay the lump sum amount as agreed under the policy. If the medical treatment cost goes beyond the sum insured, then the insured has to bear the same from his/her pocket. "The insurance under this policy shall cease upon payment of lump-sum," as per the policy document.

No payment under this policy will be made if the insured person travels outside India during the commencement of the policy, that is, during the policy period.

Under the sandbox regulations, the product is offered for a limited period. In this case, the Star Novel Coronavirus Insurance Policy is currently issued for only a tenure of one-year, the insurer may withdraw the policy at any time in case it is found unviable to continue. Therefore, renewal under this policy will be up till the time the pilot product is offered. This way, the policy may not be renewable every year unlike a regular health insurance indemnity policy, which can be renewed every year.

What you should do?
Naval Goel, CEO, said, "If you are or become a victim of COVID-19, a regular health insurance policy will come to your aid if it is an existing policy and the initial waiting period is over. A regular health insurance plan offers comprehensive coverage and the sum assured will be sufficient to assist you in the hour of need. You should not consider specific COVID-19 plans such as Star Novel Coronavirus as the sum assured (under it) will be insufficient and may not be able to provide adequate cover and has a waiting period of 16 days."

Point to note
The insured person is eligible for relief under Section 80D of the Income Tax Act in respect of the premium paid by any mode other than cash.
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