While the Covid-19 pandemic has made health insurance the largest premium segment in general insurance, consumers are preferring to buy comprehensive policies with higher sum insured rather than just targeted covers.
“Increase in sales of health insurance policies started towards the end of April and start of May, with the surge in Covid cases in India. Health indemnity policies have seen a sharp rise in sales,” said Amit Chhabra, Health Business Head, Policybazaar.com.
The sum insured has increased significantly to anywhere between ₹25 lakh and ₹1 crore as people have realised that the cost for Covid-19 treatment can be very high.
No compromise on health
“Earlier, people were happy with a cover of ₹5 lakh but now nobody wants to compromise on their health. Such high sum insured policies have also become more affordable and a 30- year-old person can get a ₹1-crore sum insured health cover for as less as ₹9,000 per year,” he said, adding that the Corona Rakshak and Corona Kavach policies have also seen good traction but are taken by people who can’t afford a full health cover.
Data with General Insurance Council shows that health insurance premium in July amounted to 32.7 per cent of the general insurance market, taking over the motor segment which stood at 30.3 per cent.
Similarly, gross direct premium income underwritten by general and standalone health insurers grew by 10.44 per cent between April and July this year to ₹18,415.5 crore even as the overall general insurance industry expanded by 1.62 per cent in the period.
“Health insurance will continue to pick up going forward, with the pandemic creating a renewed interest in health insurance,” CARE Ratings noted in a recent report.
Demand for Covid-specific covers
According to Rakesh Goyal, Director, Probus Insurance, most customers prefer to buy comprehensive health covers of at least ₹10 lakh along with a top-up. The number of transactions for health insurance on his platform has increased by about three times up to July compared to February this year.
“Corona-specific covers are seeing demand, but a lot of it if from people who cannot afford a full cover, or have co-morbidities or are too old,” he added.
Insurers also said the standard Arogya Sanjeevani policy is seen to be a plain vanilla product with limitations on room rent and a co-pay element that are often not preferred by many customers.