70% Choose Health Insurance For Reasons Beyond Tax Benefits: ICICI Lombard Study

In a recent report on ‘Emerging trends in health insurance with a focus on taxation benefit’ by ICICI Lombard, it has been found that only 30 per cent of consumers take health insurance for the sake of  'Tax exemptions or tax rebates' indicating that tax benefits are not the primary driver for most consumers.

“Only 30 per cent of consumers cited 'Tax exemptions or tax rebates' as one of the top reasons for purchasing health insurance,” stated the report. The report also stated that women, with the growing female working population, are more likely to purchase health insurance for tax exemptions in the next year.

The report highlighted that the cashless claim has emerged as the top reason for the intention to purchase health insurance, followed by the protection of savings and managing inflating medical costs.

“While the understanding of health insurance as a tool for protection is on the rise, only 54 per cent of consumers are fully aware of how they can save tax by investing in health insurance, highlighting the need for increased awareness initiatives,” the ICICI Lombard report pointed out.

The preference for health insurance as a tax-saving option is on the rise in non-metro areas, emphasising its increasing appeal beyond major cities, the report cites adding that the age and life stage play a critical role in financial decisions, with individuals aged 26 to 45 making a greater set of investments.

A significant 84 per cent of financially savvy customers have invested in health insurance, showcasing the growing recognition of the importance of health coverage.

Sheena Kapoor, Head of Marketing, Corporate Communications and Corporate Social Responsibility at ICICI Lombard said, "Our recent report on 'Tax Savings and Health Insurance' uncovers valuable insights. It's evident that while tax benefits play a role, they are not the driving force behind most consumers' decision to invest in health insurance. Only 30 per cent 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. This revelation reshapes the dialogue in our industry, underscoring the fundamental value of health insurance."