Insurers in the country have covered around 60 lakh lives under the two covid-19-specific policies, Corona Kavach and Corona Rakshak, Subhash Chandra Khuntia, chairman of the Insurance Regulatory and Development Authority of India (Irdai) said on Thursday.
He was addressing the 22nd Insurance and Pensions Summit organized by the Confederation of Indian Industry (CII).
Corona Kavach is a standard indemnity policy offered by all general and health insurance companies, while Corona Rakshak is a fixed-benefit policy, which pays 100% of the sum assured on positive diagnosis for covid-19.
Since their inception, insurers have sold around 28 lakh Corona Kavach policies with a total sum insured of ₹1.02 lakh crore and 32 lakh Rakshak policies with a total sum assured of ₹1.1 lakh crore.
While Kavach has a cap of ₹5 lakh on the sum insured, Rakshak has a cap of ₹2.5 lakh. Both these policies were launched on 10 July 2020.
“Kavach and Rakshak are both small-ticket policies because they are short-duration products. Premiums too in most cases are under ₹1,000, so I am of the view that 60 lakh is not a very big number given the country’s population. These policies are not huge revenue churners for insurers, but they will help companies in reaching out to customers so they can cross-sell regular health policies once the covid-19-specific policies lapse,” said Naval Goel, founder and CEO of PolicyX, an online insurance aggregator.
In his inaugural address at the conference, Khuntia also said that the regulator is working with the industry on developing a standard term insurance policy. Until now, the regulator had mandated two standard policies—Arogya Sanjeevani and Corona Kavach policy.
Corona Rakshak too is a standard product but insurers are not mandated to offer this. Standard policies have the same features and structure but the pricing is left to the insurers’ discretion.
“Currently, even in term plans, insurers are adding a lot of features, so in many cases, it is not a plain vanilla product anymore. The various riders can make it complex for policyholders to understand the product which is why I think there is a case for the life insurance industry to come up with a standard term insurance policy,” said Goel.