Over half of health insurance policyholders are under-insured: Apollo Munich

By: | Published: September 27, 2016 4:10 PM

Apollo Munich said some of the reasons for being under-insured are lack of awareness about how to pick the right sum insured, over-dependence on corporate health insurance coverage, willingness to pay a premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc.

Over half of health insurance policyholders are under-insured: Apollo MunichApollo Munich said some of the reasons for being under-insured are lack of awareness about how to pick the right sum insured, over-dependence on corporate health insurance coverage, willingness to pay a premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc. (Photo: Reuters)

Apollo Munich Health Insurance has found that 51 per cent of health insurance policyholders in India are under-insured. This means they have purchased low sum insured health insurance policies that would not suffice in medical emergencies.

In a survey, Apollo Munich studied around 7 lakh health insurance policyholders spread across 82 cities in India, and has found that both men and women across metros, tier 1 and 2 cities and towns are under-insured. At 52 per cent, men are more under-insured than women at 46 per cent.

Apollo Munich said some of the reasons for being under-insured are lack of awareness about how to pick the right sum insured, over-dependence on corporate health insurance coverage, willingness to pay a premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc.

Under-insurance is more prevalent in the higher age brackets as 62 per cent of policyholders are above 45 years of age. The slight respite to this grave problem is that young people seem to be choosing the right sum insured comparatively, since at 38 per cent people between 18-35 years are the least under-insured segment amongst all other age groups. The under-insurance percentage of people between 61-65 years is 75 per cent. One of the main reasons for this alarming under-insurance statistic is that policyholders do not upgrade their sum insured on the basis of their increasing age, changing needs and medical inflation.

Antony Jacob, CEO, Apollo Munich Health Insurance, said, “On the one hand, India faces a challenge of lack of health insurance penetration and on the other hand those who have health insurance are under-insured. Under-insurance not only results in increased stress and sudden out-of-pocket expenditure for policyholders during times of medical exigencies, but also gives them a false sense of assurance of being covered. People must understand that health insurance is not just a tax saving tool, and therefore be mindful while choosing a sum insured for themselves and their family.”

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Switch to Hindi Edition