Understanding the motivations behind purchasing health insurance is crucial for both insurers and consumers. A recent study conducted by ICICI Lombard sheds light on the trends and preferences driving the decision to invest in health insurance.
Cashless Claim
According to the survey, a staggering 70% of individuals purchase health insurance primarily for the purpose of ensuring adequate coverage for their health needs, rather than solely for tax benefits. The allure of ‘cashless claim’ emerges as the top reason for investing in health insurance, reflecting consumers’ prioritization of seamless medical assistance when needed the most. This underscores the pivotal role that health security plays in individuals’ financial planning.
Tax Exemptions
Contrary to popular belief, only 30% of respondents identified ‘Tax exemptions/tax rebates’ as a significant factor influencing their decision to buy health insurance. This highlights a paradigm shift where fiscal advantages, although relevant, are not the driving force behind insurance purchases. Instead, consumers are increasingly valuing the assurance and security offered by health insurance policies.
Premium Range
The survey reveals that the optimal annual premium range for an individual health insurance policy falls between Rs 8000 and Rs 30,000 for a majority (63%) of respondents. Interestingly, individuals aged between 36 and 55 years display a willingness to invest more in premiums, with a substantial portion opting for premium amounts ranging from Rs 10,000 to Rs 30,000 annually.
Financial Investments
Health insurance emerges as the most prevalent financial investment among consumers, surpassing fixed deposits and mutual funds. Notably, a significant proportion of individuals investing in tax-saving instruments prioritize health insurance (84%), followed by life insurance (72%) and fixed deposits (64%).
Investment Patterns
Age and life stage significantly influence financial investment decisions, with individuals aged between 26 and 45 years demonstrating a greater propensity to invest across various financial instruments. Moreover, the 26-35 age group exhibits the highest intention to invest in health and life insurance, highlighting a growing awareness of the importance of insurance coverage among younger demographics.
Source
Friends, family, and bank relationship managers emerge as the primary sources of information for understanding tax-saving investments, cited by 61% of respondents. However, younger individuals aged between 21 and 35 years exhibit a higher reliance on self-awareness and knowledge gleaned from the public domain.
Decision
As the survey indicates, the decision to purchase health insurance is driven by a multitude of factors, with cashless claim facilities emerging as the foremost motivator. While tax benefits remain relevant, consumers prioritize health security and seamless medical assistance. With a growing awareness of the importance of insurance coverage, individuals are actively seeking comprehensive health insurance policies to safeguard their well-being.
