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At least 70% of people buy health insurance not for tax purposes, but for adequate coverage for 'health', revealed a recent study of health insurance trends by ICICI Lombard. ‘Cashless claim' is the top reason to buy health insurance, followed by the protection of savings and managing inflated medical costs.
Only 30% of consumers cited 'Tax exemptions/tax rebates' as one of the top reasons for purchasing health insurance, indicating that tax benefits are not the primary driver for most consumers. Women, with the growing female working population, are more likely to purchase health insurance for tax exemptions in the next year, revealed the survey.
" It is evident that while tax benefits play a role, they are not the driving force behind the decision to invest in health insurance. Only 30% of respondents identified tax exemptions or rebates as their primary motivation. What truly resonates with our customers is the assurance and security provided by health insurance, surpassing mere fiscal advantages," said Sheena Kapoor, Head of Marketing, Corporate Communications &; CSR at ICICI Lombard.
For 63 per cent, Rs 8000-30,000 is the Optimal range/ best Premium Amount Annually (Yearly) for an Individual Health Insurance policy, revealed the survey. Those in the 36-55 years age bracket are willing to spend higher on premiums , with more than half stating – Rs 10,000-30,000, Optimal range/ best Premium Amount Annually (Yearly) for an Individual Health Insurance policy.
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Insurance was found to be the most prevalent financial investment among consumers, followed by Fixed deposits and Mutual Funds. Among those who have made tax savings investments and either own or intend to own, 84% had a health cover, 72 per cent owned life insurance and 64 per cent invested in fixed deposits, revealed the survey.
Age and Life Stage are also critical drivers/playing a role in making financial investments, with 26-45 years making a greater set of investments. While those in the 26-45 years age bracket are currently most vested in financial tools, 26-35 years, have the highest intention to invest across financial tools specifically Health & Life Insurance.
More than 6 in 10 (61%) have listed friends or family and the Bank RM as their key source of information to understand, how to make tax savings, However, the younger age group (21-35 years), show a greater reliance on ‘Self’ – Awareness via knowledge in the public domain.
While the understanding of health insurance as a tool for protection is on the rise, only 54% of consumers are fully aware of how they can save tax by investing in health insurance.
Close to 98% of existing health insurance owners expressed their likelihood to renew next year, and 72% intend to first-time purchase or buy more health insurance in the next year.’
