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Cover drive in pandemic times

The ongoing COVID-19 pandemic has certainly made us all understand the importance of buying health insurance.

Moreover, even the numbers tell the same story. As per prominent global reinsurer Swiss Re’s Consumer Survey, conducted in 2020, Indian consumers are the second- most active in the Asia-Pacific region in terms of searching for and purchasing new health insurance policies.

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Apart from a rise in the number of people buying health insurance, there is another noteworthy trend being observed. People have gradually started investing in health insurance policies with higher sum insured. Earlier, high-value covers constituted merely 4-5% of insurance enquiries. Today, their share has gone up to more than 50–60% as per Policybazaar.com.

There is a realisation among people that a health insurance policy with higher sum insured can take care of everything – from treatment of critical illnesses such as cancer and heart-related ailments to advanced procedures such as robotic and bariatric surgeries.

COVID-19 myth
Usually, people in India tend to develop a false perception that a family floater policy with ?7-?10 lakh sum insured is enough to take care of the medical needs of a family. However, the pandemic has completely changed their perception with people hospitalised due to COVID-19 reporting hospital bills worth ?5–?7 lakh for 14-day treatments.

With such a low sum insured, even if any two people from the family get hospitalised due to COVID-19, they might struggle to avail themselves of proper treatment due to lack of funds. Further, the cost of many major critical and lifestyle illnesses, that are quite common these days, might put them under financial pressure. For instance, there are more than 25 types of cancer that are very common in India and the treatment costs for which often go beyond ?20–?25 lakh, including surgery and chemo sessions. Another very common illness in India is heart disease, for which the treatment cost can be as expensive as ?15–?20 lakh.

‘Costs rise 150%’
Higher sum-insured health policies are also the need of the hour as, for an average urban citizen, the cost of hospitalisation has increased by approximately 150% in the last decade and this is extremely worrying.

To fight such a high medical-inflation rate, higher sum insured is the only weapon. Cashing in on the trend, many prominent insurers such as Max Bupa, Care Health Insurance and Aditya Birla Capital are offering plans with sum insured as high as ?1 crore.

Apart from hospitalisation costs, the high-value policies offer higher maternity, baby care, post-treatment, outpatient care and day-care procedure covers; they insure organ donation and fund alternative treatment. People buying health insurance plans with higher sum insured have increased. Of all the health insurance policies sold byPolicyBazaar.com in the last 10 months, the share of policies with ?1-crore sum insured accounted for 53% with the share of policies with a sum insured of ?25/30/50 lakh being 47%. The most common age group buying maximum number of plans with higher sum insured is 30–40 years.

A prominent reason for rise in the sales of plans with higher sum insured is affordability due to availability of the option of paying health insurance premium monthly.

EMI option

Last year, the Insurance Regulatory and Development Authority of India directed all general and specialised health insurers to offer the equated monthly instalments (EMI) option to customers for paying premiums.

Available data shows that almost 40–45% of first-time health insurance buyers are choosing the monthly payment mode for paying premiums. Many insurers have reported that 65% of their health insurance business has shifted online post the EMI option being rolled out.

To conclude, a high sum insured health insurance plan is always a good idea for a policyholder to secure the health of the entire family. An insurance plan with a high sum insured is an ideal option for combating the huge medical expenses and availing of the best available medical treatment. So, opt for a health scheme that provides optimal coverage in times of emergency. Even if affordability makes you anxious, you would never want to compromise your and your family’s health.

(The author is Health Insurance Business Head, Policybazaar.com)

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