5 reasons why young India is underinsured: Are you guilty?

Adhil Shetty
BankBazaar.com
Navin, 28, was living a content life after securing a good job in a reputed FMCG company. While he knew the importance of health insurance, he never purchased one himself as he believed that the cover provided by his employer was more than enough to cover the medical expenses if at all life took an ugly turn.

After working for more than 2 years with his current employer, he resigned to join a new company that paid him almost 15% more than his current salary. After the last day at his current office, he still had more than 15 days to start working at the new company. In anticipation of a demanding routine at his new job, he thought of making the most of the 15-day period in between jobs and embarked on a holiday.

Unfortunately, one day during this holiday period, he met with an accident on his way back from a friend’s birthday party on his bike. Navin was rushed to the nearby hospital and had to remain hospitalised for a week. As Navin was not employed at the time, he was not under the insurance coverage of either the previous or the new employer and all the medical expenses had to be paid from his personal savings.

Navin is not the only one who is guilty. A recent study in India came up with the conclusion that almost 70% of Indians don’t have health insurance and around 75% of young professionals between the ages of 24-30 only had an employer-provided insurance.

While relying solely on the employer-provided coverage proved expensive for Navin, there are many other reasons due to which the insurance rate is so low among the young professionals in India. Let us have a look at 5 of the most common reasons.

1. I am healthy and I don’t need a health insurance

A recent survey conducted by a leading general insurer, which involved more than 1000 young professionals between the age of 23 and 35, confirmed that more than 45% of the participants suffered from a health problem caused due to unhealthy lifestyles.

Obesity, stress, digestive disorders, high blood glucose level, and respiratory disorder are some of the most common problems in young Indians. Moreover, India is also the country with most number of road accidents every year. However, many Indian youngsters think that they are healthy and it’s not yet time to take insurance.

While you might be healthy now, there is no guarantee that you will retain your health in future as well and this makes a health insurance important for everyone.

2. Health insurance is expensive

If you believe that health insurance policies are expensive, consider the medical inflation that is experiencing a double-digit growth. Rising medical inflation means that hospitalization and medicine expenses are rising at an alarming rate and can prove a lot more burdensome than the rising cost of health insurance policies.
Also remember, you get tax sops for the premium you pay for your health insurance, so this can offset the cost of buying insurance to an extent.

3. Low awareness about health insurance policies

A number of studies suggest that low awareness about health insurance is one of the most common reasons due to which people don’t buy health insurance. For most of them, the number of options available in the market is confusing and they prefer not dealing with this dilemma.

Rather than getting confused or buying a wrong policy, you can compare and buy online or contact an experienced health insurance policy agent who can help you through the process.

4. No trust on insurance companies and agents

With the number of cases of insurance fraud in India increasing, a large number of people are wary of trusting agents and consider insurance as forced selling. If this is the case, then you can buy insurance online and can check the official website of IRDA (Insurance Regulatory and Development Authority) to go through the list of government approved health insurance as well as compare the products various companies offer.

5. No returns

A lot of young professionals also believe that health insurance policies are not beneficial as they do not offer any returns for the money spent. The fact of the matter is that health policies come with a number of advantages, such as bonus for not making a claim, tax benefits, etc. More importantly, it may not be prudent to consider insurance as an investment vehicle since it is meant for protection against unfavourable events and not for earning returns.

Health insurance is very important to protect yourself financially in case of a medical emergency. While everyone should buy a health insurance, it becomes increasingly important for young professionals as the rising medical costs can prove taxing when you have just started with your professional career.
Source : Moneycontrol