Standalone health insurer, Apollo Munich Health Insurance, has found that 51% of health insurance policyholders in India are underinsured, that is, they have purchased health cover that is insufficient to meet needs in medical emergencies.
Apollo Munich studied around 700,000 health insurance policyholders spread across 82 cities in India, and found that both men and women across metros, Tier 1 and 2 cities and towns are underinsured. With a gap of 52%, men are more underinsured than women with 46%.
Although the number of health insurance policyholders in India is increasing annually, people most often choose the lowest sum insured policy, without comprehending the process of choosing an appropriate cover. Some of the reasons are lack of awareness about how to pick the right sum insured, over-dependence on corporate health insurance coverage, and willingness to pay a premium that is only up to the highest limit of rebate under the Income Tax Act to save on tax, etc.
The survey found that underinsurance is more prevalent in the higher age brackets with 62% of policyholders above 45 years of age underinsured. With an gap of 38%, people between 18-35 years old are the least underinsured segment amongst all age groups. The percentage of people between 61-65 years who is underinsured is 75%.
One of the main reasons for the underinsurance is that policyholders do not upgrade their sum insured in step with advancing age, changing needs and medical inflation.
The research also found that South India has the highest proportion of underinsured people, at 59% of all health insurance policyholders, while the underinsurance percentage in the North, West, East and Central parts of the country is 49%, 49%, 48% and 45% respectively.
Apollo Munich offers health, personal accident and travel insurance plans. It is a joint venture between the Apollo Hospitals Group and Munich Health, Munich Re’s health business segment, which offers global health insurance and reinsurance services.