Why Indians shy away from health insurance?

People who have been paying health insurance premiums for years have stopped abruptly, and many aren’t interested in taking medical insurance in India. Turning away from a basic need like medical insurance has been the trend lately among Indians. The ordinary people believe they won’t get their premium amount back, and they generally lack trust in insurance companies. In 2021, around 514 million people were covered under various medical insurance schemes.

Rising premium
The rising premium rates have become unaffordable for many people. They give up medical insurance coverage as they cannot pay the premium. Lack of awareness of various schemes and the fear of whether they would get insurance coverage despite paying the premium are some of the other factors that dissuade Indians from buying medical insurance. Meanwhile, low-income group deem medical insurance premiums as an unnecessary expense and abruptly stop paying the premium.

Group health insurance
When employees and their family members are covered by group health insurance, they often give up individual health insurance and family floater. However, they do not realise that they will not get the benefits of health insurance coverage when they switch companies or jobs. The feeling that insurance companies do not give coverage that corresponds to the premium amount is common in India. Many complain that the benefits do not match the rate of the health insurance schemes in India.

Lack of awareness
Unlike other savings, many are hesitant to spend money on health insurance as it doesn’t return any amount or benefits if the insured doesn’t fall ill or have a medical emergency. Lack of proper awareness about the advantages of health insurance and the various schemes is one of the major reasons why medical insurance has lost its popularity in India. Economically backwards communities or people living in rural areas have limited knowledge about how medical insurance schemes work and how they could help them in a medical emergency.

No trust in insurance companies
Many are reluctant to buy health insurance as they do not trust insurance companies. They are concerned about whether their claims would be rejected or could be delayed. Besides, many complain that health insurance may not come to their aid during emergencies. Meanwhile, some are wary of the hidden guidelines and regulations. People turn their backs on health insurance as they are unsure whether some policies cover specific illnesses or current health conditions.

The complex procedures for filing claims and the delay in processing often discourage people from relying on medical insurance schemes. Those who are financially weak and belong to the low-income groups see medical or health insurance as an additional and unnecessary expense. Meanwhile, the middle class cannot afford the premium rates that keeps sky rocketing every year. Like other saving schemes, the insurer doesn’t enjoy any financial returns or gains for the amount paid as a premium for health insurance coverage. However, people wouldn’t falter in paying the premiums if they correctly understand the advantages of health insurance coverage.