Insurers Now Allowed To Offer Short Term Health Insurance Policies For COVID-19

In a circular on 23 June, the Insurance Regulatory and Development Authority of India (IRDAI) issued guidelines allowing for the introduction of short-term health insurance policies providing coverage for COVID-19 disease. Life, general and health insurers will be allowed to issue policies for a period between 3 and 11 months in the form of the individual as well as group insurance products.

These new guidelines provided on 23 June will remain valid till 31 March 2021, unless extended further by IRDAI.

"With an objective of making available insurance protection to various sections of people in the prevailing COVID-19 pandemic, it is considered that short term health insurance policies providing coverages specific to COVID-19 disease is the need of the hour. Accordingly, all insurers (Life, General and Health Insurers) are allowed to offer COVID - 19 specific short-term health insurance policies subject to these guidelines," the circular read.

Features of COVID-19 specific short term health policy:

• Short term health insurance policy should not provide a cover of less than 3 months or more than 11 months.
• The policy term shall be stated in multiples of completed months.
• Where the term of the policy is fixed as 12 months, the same will not be considered as short-term health policy.
• These short term policies are only permitted to provide health insurance cover for COVID-19 specifically.
• The waiting period on the policy cannot exceed 15 days.
• No separate add-ons are permitted.
• Lifelong renewability, migration and portability are not applicable.
• Only benefit based short term health insurance policies are allowed to be issued. However, general and health insurers are permitted to offer both indemnity-based and benefit--based short term health insurance policies.