India: Insurers see higher proportion of insurance customers buy pre-existing disease coverage
The proportion of customers in a study who have bought health insurance with coverage for pre-existing diseases nearly doubled to 32% in January-March 2023 (4QFY23) from 17% in the same quarter in 2022, says PolicyBazaar, an insurance broker that operates an online market platform.
This information was released by Policybazaar ahead of 7 April which is World Health Day.
Though alarming, the figures “represent a compelling need for adequate coverage as well as growing consumer awareness regarding new-age health insurance products amid shifting health dynamics”, said Policybazaar which analysed the data of over 100,000 health insurance customers in 4QFY23.
Broadly, the findings reveal a positive shift in consumer awareness regarding health insurance. Some notable insights are:
- Non-metros fare better: People in non-metro cities demonstrate a promising level of awareness of health insurance coverage, with 41% and 37% increases in customers from Tier-2 and Tier-3 cities, respectively, in contrast to a 24% uptick in Tier-1 cities. The spurt in numbers also points towards improved access to protection products allowing increased online consumption of financial services.
- Multi-year policies in demand: The share of multi-year policies in the overall pie has increased from 24% to 68%. The primary reason for this is an average 17% hike in premiums of popular plans by insurance companies. As many as 42% of customers are willing to pay upfront for three years in a bid to spare themselves the future financial strain of growing medical inflation.
- Rise in high-sum insured policies: Similarly, consumers are also inclined towards high sums insured in their policies. The findings show a steep rise of 56% in the number of customers opting for a cover higher than INR500,000 [$6,100] (39% in 4QFY22 vs 61% in 4QFY23). Not just this, the number of customers opting for a sum insured of less than INR500,000 fell sharply by 36%, reflecting a lower propensity for smaller coverage. With a rise in critical illnesses and large hospitalisation expenses, consumers now understand the significance of a higher sum insured.
- Top features in demand: The rider for a higher coverage amount also ranks at the top of the most-asked-for features by consumers. Other popular riders are coverage for annual health check-ups and OPD (treatment at outpatient department). Around 60% of the customers look for an annual health check-up element in their policies, showcasing a growing inclination towards preventive healthcare.
- Wellness benefits are sought-after: The demand for preventive healthcare is also reflected in the high demand for wellness benefits. These grant customers discounts or benefits at renewal for meeting fitness criteria set out in their policy. As many as 45% of customers look for wellness benefits, which not only characterises growing consumer awareness of healthcare but also of new-age features in health insurance products.
The other features that emerge as popular choices in the findings are locking premium by age, 7x higher sum assured, unlimited restoration benefit, and short or no waiting period for senior citizens. These innovative features make health insurance plans more flexible and customisable to suit changing consumer needs.
Policybazaar.com is one of India’s largest insurance marketplaces. It is the flagship platform of PB Fintech, which owns the FinTech brand, Paisabazaar.com, and the lending & insurance marketplace in the UAE region, Policybazaar. ae.
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