Indian Consumer: Awareness about Health Insurance

Despite the projections of a high growth in the health insurance sector, India still lags behind when it comes to awareness about the same. The general public are by and large ignorant about the benefits of availing healthcare insurance policies and there lies an urgent need to educate the masses regarding the importance of Health Insurance and the benefits derived on account of it. 

Health insurance sector is very much in a formative stage still. There are health insurance products for more than 20 years now but still the penetration level is barely 2-3 per cent of the population. Though the general public is concerned about surging health care costs, they don’t realize that health policies can save them monetary losses. They often looks to purchase health insurance only when he or she needs medical treatment or at an older age. It is advisable to purchase insurance beforehand and preferably at a younger age as the premiums are cheaper, and customers will have no ‘pre-existing ailment exclusions’ as they grow older. Another factor that should encourage Indians to purchase health insurance is that they can avail of tax benefits under Section 80D of the Income Tax Act for most health insurance plans.

There is an irrationalfear among people that insurance is wastage of money and that they are never going to be awarded the claim money. In this sense, the role of intermediaries becomes vital who can assuage them comfortably. Again the distribution channels in India are very weak. Considering that Indian market is largely retail, consumers should be reached out not specifically for each need but through an intermediary who will look comprehensively into their needs.

In most cases, the insured is not even aware of his rights and duties. Most insurance purchasers do not have any clue as to what they should do if they have a disagreement on any issue with their insurance company - whether it is a simple thing as repeatedly asking for a change of address or receiving the policy itself or a slightly more difficult one that involves a dispute/ difference of opinion on the claim settlement. They need to be aware that there is an insurance ombudsman who looks into such grievances and resolves the matter.

Against this backdrop, IRDA has taken the responsibility to launch a multi-media, multi-level awareness campaign to address the issues related to the above mentioned problems. The insurance regulator is leaving no stone unturned to increase insurance awareness among prospective and existing policyholders in India. Given that the regulatory framework is improving and that many new players including foreign companies are willing to come in, things might be at a take-off stage.