It is certainly better to buy health insurance earlier in life rather than waiting until a certain age, says Shashank Chaphekar, Chief Distribution Officer, Manipal Cigna Health Insurance.
In an interview with MintGenie on “World Health Day”, Chaphekar said that there is a lack of awareness and understanding among the general public about health insurance being a living benefit product.
Q. Many people decide ₹10 lakhs as the default health insurance coverage. What factors should one consider before deciding on the right insurance amount?
Before deciding on the right amount of health insurance coverage, choosing the right health insurance expert is equally important, as that will take care of the living benefits of health insurance throughout your and your family’s lifetime. So, while determining the appropriate level of health coverage there are a number of factors that should be considered.
First, it is important to consider the current and future healthcare needs of the intended policyholders and their families. It is important to ensure that the coverage is sufficient to cover any possible medical expenses, such as hospitalization and surgery, as well as any other OPD treatments that may be needed.
Second, it is important to consider the cost of living in the area, as well as the cost of medical care in the area. This is because the cost of medical care can often vary depending on the region and type of medical care sought.
Finally, it is also important to consider any pre-existing medical conditions or additional coverage that may require for critical illnesses. By taking into account all of these factors, and the continuously rising medical inflation, one needs to have health coverage of at least ₹10-20 lakhs to meet any form of treatment or hospitalisation costs for major illnesses.
Q. The punchline “Insurance Zaroori Hai” did not resonate with people as “Mutual Funds Sahi Hai”. What factors continue to hinder the growth of health insurance in India?
Health insurance in India has grown significantly over the past few years, but there are still many factors that are hindering its growth. One of the biggest factors is the lack of awareness and understanding among the general public that health insurance is a living benefit product. Many people are unaware of the services, benefits, and coverage that health insurance offers, and as a result, they do not see the value of purchasing health insurance.
Another major factor is the low penetration of health insurance in India. However, we are seeing today a change in the mindset of people, and Health Insurance is gradually moving from a ‘grudge’ purchase to a ‘nudge’ purchase. Also, the insurance regulator IRDAI wants to boost insurance penetration, and with the mission of “Insurance for all” by 2047, we can see initiatives being taken by the regulator to make this happen.
Therefore, in a relatively uninsured and underinsured market like ours, high out-of-pocket expenditure, increased awareness, rising healthcare costs, higher prevalence of lifestyle diseases and the Government’s positive stance on healthcare will further accelerate the growth of health insurance going forward.
Q. Many people buy health insurance only after a certain age and that too mostly for tax benefits. What are your views on the same?
It is certainly better to buy health insurance earlier in life rather than waiting until a certain age, as this can help you avoid the risk of pre-existing medical conditions that could make it harder to get coverage or lead to higher premiums. Additionally, health insurance can provide financial protection in case of unexpected medical expenses, which can be especially important as you get older and face a higher risk of developing health issues.
That being said, it's understandable that many people may not prioritize health insurance until they reach a certain age or have other financial priorities. However, it's important to note that the tax benefits of health insurance should not be the primary reason for buying it.
While tax deductions or exemptions can help reduce your tax liability, they should not be the only factor you consider when choosing a health insurance plan. Also by doing your research and choosing the right health insurance plan that meets your needs, you can help ensure that you and your family have the financial protection you need in case of unexpected health issues, regardless of your age.
Q. Why do most private health insurance companies find it difficult to grow in Tier-2 and Tier-3 cities?
Firstly, there still is a lack of awareness among the people in these cities regarding the importance and benefits of health insurance which may result in low demand for health insurance products.
Secondly, people in Tier-2 and Tier-3 cities have lower income levels compared to those in Tier-1 cities. This may make health insurance products relatively expensive for them, thereby reducing the affordability of these products.
Thirdly, private health insurance companies may face challenges in setting up a robust distribution network in these cities. However, the transition to a more digital world is making it possible for insurers to reach those far and near, across Tier-2 and Tier-3 cities as well.
In the coming years, with the greater penetration of health insurance in Tier 2 and Tier 3 towns, and with IRDAI’s ‘Bima Vahak’ and ‘Bima Vistaar’ initiatives to enhance the insurance distribution force, we strongly believe that the health insurance sector will continue to grow in the times to come in India’s rural population. But insurers need to make health insurance far more sustainable for the overall ecosystem and relevant for the customers.
Q. What should one keep in mind for a smooth claim settlement?
Before buying a health insurance plan, firstly one should definitely make an honest declaration of their health status so that there are no challenges during the claim process. It is also important to be aware of what is covered in the health insurance policy and what is not covered in order to avoid any future hassles for reimbursement or cashless claims.
Thus, in order to ensure a smooth claim settlement, it is important to make sure to have all of the necessary documents and information readily available, such as medical reports, claim documents, policy numbers, contact information, and a detailed description of the incident.
Keeping the insurance documents handy will result in a smoother process and get the claims settled faster. Hence, following these tips can certainly help ensure that the claim is settled in a timely and satisfactory manner, however, the time limit for claim settlement may vary from insurer to insurer.
Manipal Cigna has created a differentiated and digital-first experience to provide real-time and personalised support in order to assist our customers as quickly as possible. The digital changes we have introduced to our processes have one goal- to make the claims experience for our customers smooth and hassle-free.