Why Do So Many Indians Still Not Have Health Insurance?

Despite government initiatives, around 30-50% of the Indian population still do not have health insurance. They lack medical insurance due to low awareness, high premiums, and trust issues with insurers regarding reimbursement or claim rejections.

Explore the reasons why Indians consider health insurance inadequate and expensive, depend on employer-provided protection, or prioritise visible expenses.

Why Indians Still Do Not Have Health Insurance?

Millions of Indians are still financially vulnerable without health insurance, despite digital access and broader awareness. Around 50 crore Indians have medical cover, largely due to government schemes, but only 20% are insured with effective protection against rising hospital expenses. Here are the reasons:

1. Lack of Awareness

The primary reason for not having health insurance in India is the lack of awareness about coverage, variations, and benefits. People in economically weaker sections and rural areas have limited knowledge about how health insurance safeguards against medical expenses and how to claim it. They do not understand deductibles, co-pays, waiting periods, pre-existing exclusions, etc.

2. Not Having Faith in Insurer

Many people have trust issues with insurance companies due to stories of rejected claims or denied reimbursement. As a result, they hesitate to buy health insurance due to a lack of trust. This hesitation and mistrust are other reasons people do not invest in financial protection.

3. Feels Expensive

Health insurance premiums are perceived as expensive, making it seem like an investment without immediate returns. Most people in India feel insurance premiums are unaffordable, largely due to a lack of knowledge about various plans and how premiums depend on coverage, benefits, and other factors.

4. Dependency on Other Coverage

Some Indians rely on government schemes or employer-provided group health insurance, believing they are sufficient. However, these often come with co-payments, limits, or exclusions and may not cover the entire family, making a personal health insurance plan a necessary backup.

5. Myth of Being Fit

Most Indians believe they are healthy and capable of handling emergencies, but air pollution, lifestyle diseases, accidents, and unpredictable infections are becoming riskier, even for younger adults. The benefits of health insurance are often invisible until you need it, which can force you to reconsider buying insurance.

6. Perceived Low Value

The assumption that health insurance policies do not provide value for the premium amounts. People often avoid medical care plans as they do not offer immediate coverage or returns until the waiting period is over and hospitalisation occurs.

7. Low Priority

In India, around 6 crore people were pushed below the poverty line due to high medical bills. In fact, 17 crore Indians spent 10% of their household income on medical care. Priorities like house rent, school fees, and family emergencies took precedence over insurance plans.

Final Statement

Health insurance is not mandatory in India. It offers financial assistance to secure the insured person with comprehensive benefits during health emergencies. Health insurance ensures access to top-notch treatments without upfront payments or denting your hard-earned savings.

With rising medical inflation and treatment costs, a single hospitalisation can lead to a financial burden. Take a plan that aligns with your desires and health requirements.