A latest survey by fintech firm PolicyBazaar highlights a significant disconnect between consumers’ intentions, awareness, and actual ownership of health insurance in India. While 28.3% of the 3,955 respondents identified health insurance as a “must-have” product for their financial planning, only 18.7% owned health insurance policies.
This ownership gap exists despite high awareness levels; nearly 83% of respondents claim they understand health insurance as a financial product and recognise its importance. Additionally, over one-third of respondents have considered purchasing health insurance, and about 23% had owned policies in the past but have allowed them to lapse.
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When ranking essential financial products, health insurance was placed in the top five but significantly trailed behind other investment options. Gold led preferences at 54%, followed by insurance-linked savings schemes such as Life Insurance (43%), fixed and recurring deposits (42%), and real estate (40%). This prioritization suggests that health insurance is perceived as less valuable than other financial products, possibly due to concerns about cost and efficiency.
Cost concerns are evident in the coverage amounts selected by policyholders. The survey found that 48% of health insurance owners have coverage of ₹5 lakh or less. Coverage rates were particularly low in tier 2 and tier 3 cities, where policies worth up to ₹5 lakhs were most common. The second most popular coverage range among all respondents was between ₹5-10 lakhs.
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In the absence of health insurance, respondents reported various alternative strategies for handling medical emergencies. About 21% of those without health insurance said they would rely on investments in mutual funds, stocks, or similar vehicles to cover health costs. About 16% would resort to borrowing from friends and family or taking personal loans. What was most concerning is that 19% of respondents admitted they have no plan in place for medical emergencies.
