Demand For Affordable Health Insurance Surges, Employer Policies Insufficient: Report

The demand for affordable health insurance has surged in India, with 7 out of 10 individuals opting for cost-effective coverage in FY24, as per a study conducted by Policybazaar.com. Notably, the majority of buyers belong to the elderly age groups.

The study revealed that among the customers choosing affordable plans, 60 per cent are purchasing insurance for the first time. Specifically, individuals aged 55 and above constitute the largest proportion of buyers, accounting for 34 per cent of the total, followed closely by those in the 41-55 age group at 29 per cent.

Significantly, a quarter of senior citizens are now opting to reduce their co-pay to 0 per cent. Co-payment, previously obligatory for new entrants into plans after the age of 60, is being eliminated or made optional in many current plans, with individuals given the choice to reduce it to 0 per cent by paying an additional premium.

Moreover, 60 per cent of those purchasing affordable health insurance choose to include at least one rider with their plan. Among these, consumable riders are the most popular, selected by over 65% of customers, followed by Day 1 cover riders for common ailments such as Asthma, BP, Cholesterol, and Diabetes, chosen by 33 per cent of customers. Additionally, room rent modification riders and cumulative bonus booster riders are preferred by 17 per cent and 15 per cent of customers, respectively.

The trend highlights a growing recognition among customers that relying solely on corporate health insurance may not be adequate for their needs.

Thirty per cent of individuals who are already covered by employer-sponsored medical insurance choose to complement their coverage with a retail health insurance policy featuring deductibles, enabling them to tailor their plan to be both affordable and customisable according to their requirements.

Policyholders typically select a minimum sum insured of 5 lakhs, with popular options falling within the range of 5 to 7 lakhs.

Additionally, 15 per cent of customers opt for the 'Preferred Hospital Network' option, which provides up to a 15 per cent discount on the premium.