After the pandemic hit India, there has been a growing demand for health insurance among people and more people are getting life cover, but the amount of sum insured has gone down.
Due to the rising number of Covid-19 cases, the demand for retail health covers in India has gone up by 98 per cent between November 1 and December 31, 2021, as compared to the same period in 2020, finds a recent study by Digit Insurance, a private general insurer in India. The study was conducted based on the data related to health insurance gathered by Digit Insurance across various small and big cities in India, including Delhi, Bangalore and Thane.
With the growing demand for health cover in India, there has been a spike in the number of lives covered under group health covers as it rose by more than 170 per cent within the time frame considered in this study. While around 1.5 lakh people opted for life cover in 2020, the same number rose to more than 4 lakhs in 2021. The number of health covers sold also got doubled between 2020 and 2021.
The increase in demand is not only specific to any specific health insurance product, rather it has been across all retail health insurance products. Despite a growing rise in the demand for health insurance products, the average sum insured across products has gone down by 17 per cent, finds the study. “This indicates that more people are buying health insurance but with lower sum insured,” states the report. Individuals opted for a higher average sum insured of Rs 8.13 lakh in 2020, but it went to Rs 6.93 lakh in 2021.
While the surge in demand in big cities like Mumbai, Delhi is more than 104 per cent, even in smaller cities like Nashik, Rajkot, the demand increased by 95 per cent.
“The pandemic has definitely made more individuals and employers realize the impact of the skyrocketing medical expenses, in turn encouraging them to buy health covers. We believe the overall demand would settle on a higher trend even though it could flatline once the current wave is brought under control,” Vivek Chaturvedi, Chief Marketing Officer and Head of Direct Sales, Digit Insurance.
Even on a pan-India level, there has been a growing demand for health insurance and life coverage, revealed Saurabh Mishra, Joint Secretary, Government of India, Department of Financial Services, in a recent conversation with Outlook Money.
“From a sectoral perspective, in the life insurance industry, new businesses have accounted for 45 per cent of the premium. It is a clear indicator that more and more people have woken up and understood the need for insurance and considered it as a requirement,” added Mishra.