The health insurance industry in India is witnessing a consistent growth with more and more individuals buying individual health insurance policies, primarily due to increasing medical inflation and awareness about the tax benefits. Individual policies are growing in popularity as families and busy working people look for more financial security, and independence, when it comes to health insurance.
The increase in healthcare cost and growth of lifestyle diseases has made people focus on medical insurance than the spending on treatment that is situation driven. Meanwhile, the tax benefits you could avail on health insurance premium under Section 80D of the Income Tax Act have largely driven policy purchase among salaried folks and freelance professionals.
Increase in personal health protection
The trend towards individual health insurance indicates evolving preferences on how people want to finance their health care. Unlike group or family floater plans, where all members are covered by one policy and share it, an individual policy provides coverage that is customized to each person and has the full sum insured available only for their use.
During the pandemic, there has been a huge uptick in awareness for the need for seamless coverage. Most professionals discovered they can’t count solely on employer-sponsored group insurance and ‘bring it with them’ when they moved from job to job. Personalised policies ensure both continuity and flexibility, as policyholders can select their hospital, sum insured and add-on features.
Because of this great independence, personal health insurance can be a viable and trustworthy option to help provide long-term financial security for medical emergencies.
Tax incentives driving awareness and uptake
Tax consciousness has been one of the most powerful stimulants for increased take-up of health insurance. Section 80D allows a deduction for the premiums paid for an individual’s own health insurance policy as well that of his or her family members.
For instance:
- Rs. 25,000 can be availed to self, spouse and dependent children up to a maximum sum of Rs.
- Don’t forget to claim for up to Rs. 25,000 paid towards your parents’s health policy (Rs. 50,000 if they are senior citizen).
These tax savings have helped minimise cost of insurance premium, making it a value-for-money proposition. Helping spread the word about these benefits are insurance advisors and digital platforms, which have been essential to first-time buyers seeing health coverage not just as protection but also as a smart financial tool.
Now that a growing number of young tax payers are realising the twin benefits of medical security and tax efficiency, demand for individual policies have shot up in urban as well as semi-urban areas.
Comprehensive features driving policy preference
The individual health insurance plans of today are much more robust than ten years ago. Today’s policies typically include:
- Hospitalisation costs: For room rent, surgery and doctor’s fees.
- Pre-and Post-hospitalisation: Costs are incurred prior to hospitalization and after the treatment for a period between 30-60 days.
- Daycare process: Cover for surgeries which do not need hospitalisation over night.
- No Cashless treatment: No upfront payment at a large network of hospitals.
- No-claim bonus: Amount paid to the insured for every claim-free year by which the sum assured is enhanced at no additional premium.
- Add-on covers: Add-ons like critical illness, maternity or daily hospital cash benefits.
As health insurers are stealing focus toward transparency and more customer-friendly product designs, purchasers have clearer insights into what’s covered and not-covered as well details on the claim process.
Growing interest in parental coverage
In addition to policies per body, there has been a dramatic increase in parents health insurance buying as well. With medical inflation increasing with each passing day, a lot of professionals are opting to get their parents covered under special policies.
Despite the common sum insured in family floater plans, separate policy for parents help to take complete care without eating into the primary insured’s limit of indemnity. Also, the higher limits of tax deduction for senior citizen coverage have motivated more families to purchase health plans for old parents.
It is also providing policies which are mainly designed for aging and obvious diseases like diabetes, asthama, liver or kidney problems with maximum benefits.Thereby the old aged people could get particular health care services without paying much.
Awareness through digital platforms
Transformation In the era of connectedness, buying health insurance for individuals becomes easy. Online comparison, premium calculator, and instant policy issuance has made buying easy for the internet generation.
Digitisation of this industry has been very much underway for a while now and it’s having a similar impact, with the benefit that insurance aggregators or financial platforms have made users more aware of tax savings and policy features/claims process due to better explanations. Most insurers currently offer consumer education in the form of blogs, webinars and tools that help individuals make decisions without relying exclusively on agents.
In addition, inclusion of wellness apps and preventive health check-up benefits have made individual policies more appealing. These digital offerings reward and incentivize policyholders to be healthy and get discounts on renewal or reward points.
Preventive and long-term health focus
In today’s development of the industry, health insurance covers more than just crisis handling to also include preventive health schemes. A range of standalone individual health policies now offer annual health checkups, teleconsultations and fitness tracking facilities.
Insurers are teaming up with health care providers and wellness startups to make services such as nutrition counseling, discounted diagnostic tests and virtual doctor appointments available at a discount. This preventive emphasis decreases future health risks and fits with the overall trend toward self-managed proactive wellness.
For a policyholder, these wellness-linked features bring concrete value and make health insurance more of an all-year-round support mechanism than just something you would use at the time of hospitalisation.
Affordability and accessibility remain challenges
Affordability is still an issue for less affluent and first-time buyers, however. Increasing premiums, particularly for older people or those with pre-existing medical conditions, can discourage prospective policyholders.
But regulators and insurers are tackling the problem, by offering simplified, standardised products that can be less costly to enter. Otherawareness campaigns to address myths regarding exclusions, waiting periods and claims procedures are also being carried out.
With increasing financial education, more people would recognize health insurance as a preserver rather than just another provider of wealth.
Conclusion
A rise in the number of people opting for individual health insurance also speaks of how India is moving towards planning out finances and healthy living. Increased knowledge about tax benefits with Section 80D has led to this change – insurance is becoming both logical and lucrative.
The corresponding expansion of parents health insurance also suggests a rising culture of family obligation and future planning. The accelerating ease of access to digital transformation and integrated wellness means that coverage for each individual is sure to remain the bedrock of financial protection and preventative health care for years into the future.
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