The fear of COVID-19 has motivated one in three Indians to buy a health insurance policy. More than 60% of Indians are thinking about buying health insurance cover either after having personally suffered from COVID-19 and been left with a hefty hospital bill or learning of such an experience from friends.
These findings were part of the annual survey conducted by Policybazaar.com to celebrate National Insurance Awareness Day on 28 June 2020. Policybazaar is India’s largest online insurance marketplace.
Policybazaar.com surveyed more than 4,000 existing insurance buyers who bought cover from its platform in the last six months, to understand the attitude of Indians and their purchase triggers when it comes to life, health and vehicle insurance. The survey was conducted between 19 June and 23 June 2020.
Rising healthcare costs in general and the recent reports of major expenses related to treatment of COVID-19 at private hospitals have changed India’s attitude towards insurance, especially health insurance.
When choosing a health insurance brand, two in three Indians make a decision based on the network of hospitals covered. About 58% of the respondents took into account the insurer’s claim settlement ratio.
When it comes to life insurance, nearly seven in 10 respondents purchased a term insurance plan as a means to protect their family’s financial future and not merely as a tax-saving instrument. This healthy awareness about the purpose of insurance is encouraging for a country with a low level of insurance penetration.
The findings mark an improvement in the number of people buying term insurance for long-term security (seven out of 10 vs six out of 10) compared to the survey in 2019.
Given the prevalent uncertain economic climate, nearly 51% of the respondents felt the ideal insurance cover was 20 times their current annual income. Peer group and friends’ network have emerged as significant triggers for life insurance purchases. Nearly a third of the respondents were influenced by friends and 25% by online media while deciding on investing in life insurance.
III creating insurance awareness among masses
Insurance Institute of India (III) secretary general Deepak Godbole believes that the view regarding insurance and its role in risk management is now changing and that more individuals are incorporating the insurance portion in their financial portfolios.
“The COVID-19 outbreak has brought in the realisation that insurance has been one of the most important financial tools to have. Businesses have also realised that this is a good time to consider their catastrophe risk coverage,” he said.
The III and its associate institutes carry a self-proclaimed mandate of increasing insurance awareness to every nook and corner of the country. III plays this role effectively through developing content, conducting examinations and imparting trainings.
The associate institutes are also doing their bit in promoting the concept through increasing awareness by conducting workshops, seminars and other events in schools.