The World Health Organization officially declared the COVID-19 outbreak a pandemic on March 11 2020. As we complete a year, with more than millions of positive cases, and another wave sweeping the country, Policybazaar surveyed more than 15,000 existing insurance buyers to understand the consumer sentiments & their purchase triggers when it comes to health insurance in the last Financial year FY’21.
The key finding marks an improvement in the overall sum insured that consumers are opting for in FY’21 (avg sum insured 22.42 lakhs Vs 11.4 lac) compared to the survey in 2020. This indicates a sharp increase in awareness and demand for high cover protection policies.
Rising healthcare costs in general and reports of astronomical COVID-19 treatment costs at private hospitals have changed India’s attitude towards the health insurance. The findings indicate most consumers are purchasing health plans with a bigger cover, showcasing an uptick in demand for higher sum insured health policies (>25 lac cover) by 40% over the last financial year.
Coming to 1 cr health covers, the findings suggest the share of these plans bought by consumers has now grown to 35%. People in the age-group of 31-40 year hold the highest share in buying 1 cr health plans i.e. 19%, followed by the age bracket of 18-25 years i.e. 18%.
Another interesting trend is the preference of EMI by customers for purchasing Health Insurance policies. This was earlier almost non-existent and has now become the preferred payment option for ~40% customers. The IRDAI has done a commendable job in ensuring EMI based options are available to customers from all Insurers.
Another very encouraging step by the regulator was the launch of Corona specific products (Kavach and Rakshak), both of which saw significant volumes as an affordable protection against COVID-19. Now that affordability concerns are subsiding, there is an increasing trend of more and more customers migrating to comprehensive health insurance plans. Corona plans have been instrumental in increasing awareness of insurance overall.
Amit Chhabra, Head Health Insurance, Policybazaar.com, said, “The pandemic has acted as a catalyst for increased awareness of health insurance. People have realized its importance for unforeseen health-related situations and are now investing more in high sum insured plans for advanced treatments.
“The findings are a part of the survey conducted by Policybazaar.com to celebrate World Health Day, which is crucial given the on-going pandemic,” Chhabra said.
Highlighting yet another prominent trend, the survey depicted that the share of policyholders porting their existing health policies with lower sum insured i.e. 5 – 10 lakh to plans with higher sum insured (>25 lacs) has increased by a significant margin. In FY’21, Policybazaar witnessed a massive growth of 150% in the number of porting requests from to higher cover plans, showcasing that consumers realise their current policies may not be sufficient.
Focusing on the claims filed, our survey findings revealed that in April’20, of the total claims reported, only 4% were COVID-19 related claims. However, as the pandemic peaked in the month of September, the proportion of COVID-19 related claims increased to approximately 40% of the total claims.
The no. of claims steadily increased from 8% in May to 23% in July and to 34% in August. The overall trends depict how health insurance in FY20-21 was amongst the most sought-after investment instruments leapfrogging all other insurance categories