It's a well-acknowledged fact that India's insurance penetration which has seen a steady improvement still remains extremely low as compared to many developed economies.
A survey report released by Bajaj Capital has highlighted how India’s insurance under penetration runs in one of its most critical segment-health insurance.
As per the survey report released by Bajaj Capital, 75 percent of the respondents nearing their retirement age lack adequate health insurance. This simply put, three out of four people retiring in the next 18 months lack adequate health insurance cover.
India's insurance penetration was pegged at 3.76 percent in FY20, with life insurance penetration at 2.82 percent and non-life insurance penetration at 0.94 percent. Insurance penetration is a measure of total insurance premium to the country's GDP.
While 75 percent of respondents reported a lack of adequate coverage for themselves, 39 percent of the respondents do not have adequate health insurance cover for their spouses.
Adequate health insurance coverage for all family members is a must to ensure lifetime savings are not used to meet hospital costs. By paying a fraction of the coverage amount (sum insured), the policyholder makes sure that the insurer bears the hospital cost at the time of hospitalisation.
Commenting on the survey, Vishwajeet Parashar, executive vice president and chief marketing officer, Bajaj Capital, said, "The findings of the survey highlights the fact that medical inflation is becoming a big concern for the retirees, both, who have retired and those who are retiring in near future. Although there is no fixed rule, based on the city of residence and the type of hospitals in the area where one lives, the amount of coverage may be determined. Keeping the right coverage and buying the right health insurance is the key to keep the savings secure for the retirees."
The survey also focussed on other benefits of health insurance and its coverage which these policies offer like OPD covers, top-up features, and the option to add or buy critical illness covers.
The survey also threw some interesting insights here. As per the report, 47 percent of retirees did not have any OPD cover in their insurance policy. Also, 63 percent of retirees did not have critical illness cover, while nearly 33 percent were not aware of such plans at all.
The silver lining in the survey is how people are becoming more and more aware of their health insurance policies which get highlighted from the fact that 90 percent of the respondents were thinking of buying top-up plans to enhance their health insurance coverage.
The survey clearly senses the need of increasing health insurance coverage particularly in the wake of the ongoing pandemic. The rising cost of hospitalisation seems to be the trigger for the increased awareness among retirees.
The study by Bajaj Capital was conducted across metros and non-metro in India with a sample size of 799 respondents. The study was conducted by the company's outbound telecall department targeting males and females in the age group of 55–65 years. The sample was further divided into two groups – existing policyholders and intenders who were looking to buy/enhance coverage in the next three months.