IRDAI issues guidelines for short-term Covid-19-specific health insurance

The Insurance Regulatory Department of India (IRDAI) has allowed insurance companies to issue short-term coronavirus-specific health policies, providing some relief against the virus. All insurers - Life, General and Health - have been allowed to issue such need-based policies which can be offered to individuals or groups. The insurance regulator issued a circular, dated June 23, 2020, which mentions that these guidelines will remain effective till March 31, 2021, unless extended 

As per the circular, these policies will have a coverage period of 3 to 11 months. Along with this, IRDAI also issued some guidelines, which have to be followed by the health insurance companies –

IRDAI defines short term policies as any health insurance policy contract which has been issued for a policy term of less than 12 months. 

Short term health insurance policies are permitted to be devised offering health insurance cover specific to only COVID-19 to be offered both as individual or group products.

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Short term policies may be issued for a minimum term of three months to a maximum term of eleven months. 

In between three months and eleven months, the policy term shall be in multiples of completed months. A policy term less than three months is not permitted.

Optional covers that enhance the health insurance coverage are permitted to be offered for the same policy duration. No separate add-ons are permitted.

The guidelines ask insurers to devise ‘inclusive’ short term health insurance products where waiting periods are part of the product, such waiting period shall not exceed fifteen days.

Life insurers are permitted to offer only benefit based short term health insurance policies. General and Health Insurers are permitted to offer both indemnity based and benefit based short term health insurance policies.

Lifelong renewability, migration and portability stipulated under Regulation 13 and 17 of IRDAI (Health Insurance) Regulations, 2016 respectively are not applicable to the short term health policies offered by general and health insurers.

“This announcement will benefit consumers who do not have health insurance cover at all, or cannot afford Health Insurance or looking for some additional cover. It will offer a medical coverage, specific to corona virus (Covid 19) disease and will solve the purpose during emergency to fulfill short term gaps. In the current scenario this is a very customer centric initiative by the Regulator, however customers should still evaluate going for a regular health insurance policy with comprehensive coverage and full benefits,” Parag Ved, Executive Vice President and Head - Consumer Lines, Tata AIG General Insurance said.