By Srinath Mukherji
The outbreak of the Covid-19 pandemic had a profound impact on the Indian Health Insurance sector. Insurance providers, as well as individuals and corporates seeking health insurance, had to adapt to the new norm of limited face-to-face interactions in novel ways. Furthermore, people realized the importance of having an adequate financial backup for medical emergencies and have become keen on being sufficiently insured for the health and safety of themselves and their loved ones.
Following are the 5 ways the pandemic changed health insurance trends in 2021:
Increased Awareness about Health Insurance
The pandemic forced people to take stock of their health as well as their financial preparedness to combat unforeseen medical exigencies. The fear of intense financial drain owing to hospitalization for Covid-19 treatment has strengthened the necessity of having appropriate health insurance. People have realized that traditional methods of paying for hospitalization expenses – family savings or borrowings – cannot be relied upon to pay for large hospitalization expenses.
We have seen this increase in awareness both among individuals and families for retail health insurance and among employees and employers for group health insurance. Levels of inquiries and sales of health insurance significantly increased after COVID-19 started. Last year there was an increased interest in COVID-19 specific policies, but this subsided once it became clear that regular policies will also cover COVID-19 related hospitalization.
Increase in Sum Insured
Existing and prospective health insurance policyholders became aware of the increase in hospitalization expenses, particularly for ICUs, etc., that were required for severe COVID-19 patients. From a mindset that hospitalization typically costs tens of thousands of rupees, people became aware that it could cost lakhs of rupees or even more.
Existing policyholders have sought an increase in Sum Insured by purchasing Top-Ups and Super Top-Ups, which have become very popular due to their attractive pricing. Prospective policy buyers are seeking higher Sum Insured as compared to pre-COVID days, with a reasonable base policy combined with a Top-Up or Super Top-Up.
We have observed the same trend within Group Health Insurance for employees. Employers are seeking higher Sum Insured for their employees and dependents, in recognition of the higher amounts of hospitalization expenses.
Sharper Focus on Benefits and Exclusions
Before COVID-19, individuals and families were buying health insurance without fully assessing long-term needs and expectations. After COVID-19, health insurance purchase is being done with careful consideration. Customers are proactively seeking information on plan features and lifetime benefits to ensure that they select a health insurance plan that adequately serves them for their lifetime.
Policy buyers now enquire about specific features, particularly related to hospitalization costs such as room rent and other ancillary expenses, as these expenses tend to overshoot permitted limits during an emergency hospitalization situation. They know that medical claims might get rejected as a result, and the insured members would have to pay the differential amount out-of-pocket, which can create a huge dent in personal savings.
Rise in Digital Adoption
Social distancing guidelines and the lockdown restricted all personal and professional interactions physically. Those looking for health insurance started exploring online purchase instead of relying on agents. The pandemic caused a considerable movement away from traditional channels. Now, insurance providers and leading intermediaries have adopted smart technology and streamlined processes for comfortable electronic purchase and renewal of health insurance plans.
On digital platforms, consumers can now compare hundreds of readily available online plans to select the one that best fits their personal needs. Electronic payment methods such as e-wallets, net banking and credit cards as well as EMI options have made digital transactions convenient and accessible.
Even for claim intimation and settlement, customers have become much more familiar with cashless settlements, which are done through electronic means. During the peak of COVID-19, insurers and TPA’s were settling even reimbursement claims based on scans of claim documents.
Innovative Health Insurance Plans
Aside from launching Covid-19-specific policies, insurers have realized the relevance of expanding their portfolio by introducing health insurance plans that consider varying medical requirements of the insured members. Benefits such as OPD cover, for example, have been extended in the form of add-on coverage by some insurance companies, while others have included this feature as part of their base health insurance plans. Some insurers have launched OPD products meant for online consultations.
(The writer is Co-Founder, SANA Insurance Brokers Pvt. Ltd.)