Rising household incomes on one hand and an estimated 15% year-on-year increase in medical costs for the last few years have opened up a new opportunity for health insurance companies in India.
According to industry estimates, over 78-80% of healthcare expenses are funded by Indians out of their own pockets, and in most cases, they dip into their savings or sell off assets, while the rest comes from insurance.
“People with high income have relied on their savings to pay for healthcare expenses… this is a segment that seeks high-end medical services and treatment, using new technologies, and hence, the level of insurance they require is higher,” said Sandeep Patel, MD, and CEO, Cigna TTK Health Insurance.
The average health insurance cover for an Indian household is typically around Rs 10 lakh for a policyholder under 60. But due to rising awareness of health and treatment costs, the trend is reversing gradually.
“We have launched the Rs 1-crore cover as we realized that customers need to have bigger ticket size health insurance, more than 25% of our customers have been seeking health insurance cover upward of Rs 10 lakh, which is the average size of a health insurance cover,” Anika Agarwal, marketing head, Niva Bupa, told HT.
Niva Bupa, for example, charges an annual premium of Rs 1 lakh for a family of four—two adults and two children – under its ‘Heartbeat Health Insurance Plan.’
“Affluent policyholders travel overseas frequently, so, our product extends cover for hospitalization worldwide in case emergency treatment is required when they are traveling,” Cigna’s Patel said.
“The industry is seeing a visible need for comprehensive insurance plans with higher sum insured ranging from Rs 50 lakhs to Rs 1 crore. The increase in demand for such covers could be attributed to rising awareness among people for the need for better treatment even in tier 2 and 3 cities, coupled with higher disposable incomes that now allow them to invest in instruments like health insurance,” Tapan Singhel, MD & CEO Bajaj Allianz General Insurance added. – About: This article credit goes to Mahua Venkatesh, Hindustan Times,