Indians are underinsured: 68% have health cover under Rs 10 lakh

A whopping 68% of policyholders in India only have a medical cover of under Rs 10 lakh, with 27% having medical cover under Rs 5 lakh, according to a survey conducted by ACKO, a tech-first insurance company in India. 

At least  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% felt coverage of upto Rs. 10 lakh is adequate. 

The report surveyed 1000 respondents across six metros in India between the ages of 28 and 55 and discovered that 60% 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%), accident covers (50%), and 100 percent bill payment (45%). 

 

Health Insurance Expectations 

100% 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% of potential buyers are actively looking for a health insurance policy that offers 100% bill payment. 

Waiting Periods: 31% of policyholders believe that they are covered by their health insurance policy from day 1 while 27% 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% of policyholders and 72% 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% 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% 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% of policyholders and 56% of potential buyers. 

Lack of number of network hospitals: 41% of both policyholders and 44% of potential buyers are concerned about the insurers not having a good network with hospitals. 

46 per cent believe a health insurance policy is a must post the pandemic
Although existing and potential customers are opting for a low sum insured, they strongly feel that having a health insurance policy is a must. 48% of the policyholders state that a health insurance policy gives them timely and quality access to healthcare, 46% say it is important because the pandemic had an adverse effect on health while 43% mention that it helps meet rising medical costs. 
 

When it comes to potential buyers, 48% feel it is necessary to have a health policy irrespective of any health condition, 44% believe it will offer them the best medical care and 41% understand it will address the inflated healthcare costs. 
 

How are people buying their health insurance?

When buying insurance policies, potential buyers as well as policyholders are looking to purchase directly from the insurance company. With 30% 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% of customers have bought their policies from third parties. 
 

Even amongst potential buyers, 30% are considering buying their health insurance directly from the insurance provider digitally while 36% say they will opt for policies sold by aggregators and 33% prefer going to a third party for their insurance needs.
 

What people are not aware of 
When it comes to terms and conditions, policyholders are least aware of the availability of unlimited coverage, consumables cover and room rent capping.

Consumables Cover in health insurance refers to the financial coverage for all the medical equipment/aids classified as 'consumable', usually the single-use equipment like protective gear, masks, gloves etc. One of these is the Consumables Cover which is now offered as an add-on by many insurance companies.

Here is the list of most preferred consumable items in health insurance plans: 

1. Administrative Charges: All expenses incurred due to paperwork and documentation, admission kit, visitors' pass, discharge process, maintenance of medical records and other documentation expenses come under the administrative charges.

2. House Keeping: Daily use items such as mineral water, toothbrush, soaps, sanitary pads, slippers, combs, shampoo, diapers etc.

3. Room Expenses: The expenses incurred due to the facilities provided in the room, such as AC, television, telephone, attendant charges, luxury tax etc.

4. Surgical Equipment: Cotton, Razor, Needles, Syringes, Surgical tape and other surgical disposables used as a part of the treatment procedure.

5. Any other item provided in the product.

But there is a catch:  List of consumables as prescribed by IRDA is long but it generally serves just as a guideline and the insurers have the liberty to include/exclude any item in their policy.

For example, standalone health insurer ManipalCigna rolled out a product for senior citizens that has done away with room rent sub-limits, co-pay and pre-existing disease waiting period clauses.

An Unlimited Health Insurance Policy is a medical insurance plan that provides an unlimited sum insured. It implies you can get coverage for expensive medical treatment without worrying about exhausting the sum insured.