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Demand for Growing Ticket Size in Health Insurance

Demand for Growing Ticket Size in Health Insurance

Anika Agarwal, Vice President and Head Marketing, Max Bupa

Nov 03, 2015 12:48 PM

As health expenses increase, you may find that your base health insurance is no longer sufficient for your needs. A serious illness or accident can require long term care and complicated treatment that can quickly become expensive and exhaust your health cover. What do you do then?

Over the past few years, the health insurance sector has grown rapidly at 18-20 per cent per annum, clearly outpacing the GDP growth of the country. Important to note is that it has been the fastest growing non-life insurance segment. We can better that. The reason to believe that this growth will continue to lie in the underlying drivers of demand – rising affluence in India, rising quality of care, increase in awareness about health insurance and the higher prevalence of lifestyle diseases.

Even though medical costs are skyrocketing, the average ticket size of a health insurance policy is around 2 lakh — enough to fund small hospitalization costs, but not a serious case such as a heart attack. Therefore, a person needs to review his health insurance needs and then cover any shortfall. This makes health insurance a necessity for the common man, to protect his lifestyle and income from unforeseen medical costs due to illnesses, hospitalization or accidents. Where before, only people in metro cities went for health insurance to offset the higher cost of healthcare, today mid- and small-town residents are also opting for health insurance.

A report by Tower Watson indicates that the demand for healthcare in India is expected to increase at a staggering rate of 25 per cent a year, driven by rapidly-rising cost of medical treatment and a growing middle class. Hence the fright of Medical Inflation has been a big concern. If you check a simple hospitalization bill, you will realize the rise in medical inflation. Ignoring medical cover can easily set one back by Rs. 8 to10 lakhs during any hospitalization. When your near and dear ones are in need of the best medical services, the last thing you want to worry about is how to incur the medical expenses. Irrespective of your profession, caste or creed, each and every person needs adequate health protection. Even if you can afford to pay the bills, why do you want to deplete your savings at one go? Why not be a smart investor and transfer the risk of your health by securing coverage and also getting additional tax rebate for doing the same? If you think working hard is important, managing your portfolio, both investments and health, are also of importance. It is therefore a must to be adequately insured to meet the challenges faced during a medical emergency.

Consumers are becoming more aware and value conscious now as compared to a few years back. Owing to the increased cases of lifestyle diseases, health insurance is becoming a necessity for the people. Though the penetration of health insurance is still under ten per cent, it has been witnessing rapid growth since the past few years. It is the second-largest business in non-life insurance category after motor insurance. The growth has been fuelled by changing healthcare needs and proliferation of private players in health insurance space. The industry is now seeing a lot more innovation with product offerings and improvement in service delivery.

With increase in medical inflation and growing incidence of lifestyle diseases, customers are realising that a health cover of 2-3 lakh is insufficient to fulfil their future health needs. A health plan with comprehensive coverage of at least 10 to 15 lakhs, minimal or no sub limits, coverage for family and extended families and quality provider network is ideal. Our Heartbeat Family First variant of 5 lakh individual plus 15 lakh family floater is very popular among customers.

Because of all this, we see a need amongst people to opt for a higher sum insured which will be used a safety net during crisis. It is normal to be lured by cheaper premium amounts offered by different insurance companies. But it is also important for you to check if you’re getting the required amount of coverage from low cost insurance policies. Are important hospitals a part of the network? Is the cashless facility available? Are critical illnesses covered?

It is wiser to go for a slightly higher premium than to compromise on coverage and accessibility of healthcare.​

Health insurance is not just an optional step towards complete healthcare but a compulsory one as modern day lifestyle demands security and assurance when it comes to health. Without good health, life wouldn’t be the same. So get your health adequately insured and stay assured!​

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