Indians Are Underinsured; 68% Have Health Cover Under Rs 10 Lakh Says Report
The COVID-19 pandemic has ignited an awakening to health and its paramount importance. This crisis served as a catalyst, magnifying awareness about health and driving a surge in the recognition of the vital role of health insurance.
But would you believe that most individuals are not adequately covered for health-related emergencies? ACKO, a tech-first insurance company, reveals surprising data in its report, ‘The ACKO Health Insurance Index’.
The report surveyed 1000 respondents across six metros in Indian cities between the ages of 28 and 55 and identified that 60 per cent of the respondents feel they understand the terms and conditions of their health insurance policy. However, the assessment of policyholders’ comprehension of terms and conditions highlighted limited awareness of only three crucial features - cashless treatment (53 per cent), accident covers (50 per cent), and 100 percent bill payment (45 per cent).
Is India adequately covered for future medical emergencies?
Worryingly, Indians have revealed themselves to be underinsured. 68 per cent of policyholders surveyed only have a medical cover of under Rs. 10 lakh, with 27 per cent having medical cover under Rs. 5 lakh. What’s more interesting is that 64 per cent have not increased their coverage from the previous year.
61 per cent of potential buyers are not looking at buying health insurance with a sum insured over Rs. 10 Lakh and 65 per cent stated that coverage of upto Rs. 10 lakh is adequate. Therefore, it is evident that Indians are putting themselves at considerable financial risk by not opting for sufficient cover.
Health Insurance Expectations
100 per cent Bill Payment: Over 46 per cent of policyholders believe that their health insurance policy will cover the entire bill of hospitalization along with consumables. Similarly, 59 per cent of potential buyers are actively looking for a health insurance policy that offers 100 per cent bill payment.
Waiting Periods: 31 per cent of policyholders believe that they are covered by their health insurance policy from day 1 while 27 per cent have stated that there are no waiting periods in the health insurance policies.
Family Floater Plans: The most popular health insurance policy amongst both potential buyers and existing policyholders are Family Floater Plans. 71 per cent of policyholders and 72 per cent of potential buyers would opt for a family floater plan since it allows them to add their parents, spouse, and children to the same policy without having to buy separate policies.
Deterrents for potential buyers and policyholders when it comes to health insurance policies
Claim Process: 43 per cent of both policyholders and potential buyers expressed that a slow and cumbersome claim settlement process is a deterrent when it comes to health insurance policies.
Lack of 100 per cent Bill Payment: A major factor for potential buyers and policyholders when evaluating health insurance policies is that they want insurance companies to pay the entire bill of hospitalization. The lack of this feature is a deterrent for 47 per cent of policyholders and 56 per cent of potential buyers.
Lack of number of network hospitals: 41 per cent of both policyholders and 44 per cent of potential buyers are concerned about the insurers not having a good network with hospitals.
Is having health insurance necessary?
Although existing and potential customers are opting for a low sum insured, they strongly feel that having a health insurance policy is a must.
When it comes to potential buyers, 48 per cent feel it is necessary to have a health policy irrespective of any health condition, 44 per cent believe it will offer them the best medical care and 41 per cent understand it will address the inflated healthcare costs.
More or so, for more than 50 per cent of the potential buyers, the decision to buy a health insurance policy is influenced by family, relatives, friends, and financial advisors.
How are customers buying their health insurance?
It is interesting to note that when buying insurance policies, potential buyers as well as policyholders are looking to purchase directly from the insurance company. With 30 per cent of policyholders having bought their health policy directly from the insurer highlights that customers are gaining awareness about buying directly without the involvement of agents, thereby receiving cost benefits. However, 52 per cent of customers have bought their policies from third parties.
Even amongst potential buyers, 30 per cent are considering buying their health insurance directly from the insurance provider digitally while 36 per cent say they will opt for policies sold by aggregators and 33 per cent prefer going to a third party for their insurance needs.
“Understanding the customer's mindset regarding their health insurance needs is crucial. It is important to know how they evaluate their options and what gaps they want their insurers to fill. The ACKO Health Insurance Index has identified these gaps when it comes to health insurance. These gaps can be filled by new age insurers like ACKO to provide their customers with a better health insurance experience,” said Rupinderjit Singh, Vice President- Retail Health at ACKO, during the launch of the report.
