Consumers opted for higher sum insured policies due to Covid: Policybazaar

A survey conducted by insurance aggregator Policybazaar.com suggests that due to the Coronavirus (Covid-19) pandemic, the awareness level of consumers on the need for health insurance has increased manifold and they are also opting for higher sum insured policies

The key finding marks an improvement in the overall sum insured that consumers are opting for in FY21 (average sum insured of Rs 22.42 lakhs versus Rs 11.4 lakhs) compared to that in 2020. This indicates a sharp increase in awareness and demand for high cover protection policies, the company said in its findings.

This is because of medical inflation and the astronomical amounts that hospitals are charging for treating Covid-19 patients.

The survey suggests, demand for higher sum insured health policies such as those above Rs 25 lakh have seen a rise in demand of around 40 per cent over the previous financial year. As far as Rs 1 crore health policies are concerned, the findings suggest the share of these plans bought by consumers has now grown to 35 per cent. People in the age-group of 31-40 year hold the highest share in buying Rs 1 crore health plans at 19 per cent, followed by the age bracket of 18-25 years at 18 per cent.

Furthermore, the fact that the insurance regulator has allowed paying health insurance premiums through EMIs, has allowed consumers to opt for higher sum-insured policies because of affordability. Paying health insurance premiums through EMIs has become the preferred option for almost 40 per cent of customers.

The survey findings also suggest that policyholders porting their existing health policies with lower sum-insured i.e. Rs 5 - 10 lakh to plans with higher sum insured (> Rs 25 lacs) has increased by a significant margin.

In FY21, the company saw a massive growth of 150 per cent in the number of porting requests to higher cover plans, showcasing that consumers realise their current policies may not be sufficient.

As far as claims are concerned, the survey findings suggest, initially, of the total claims reported, only 4 per cent were Covid related claims. However, as the pandemic peaked in the month of September, the proportion of Covid related claims increased to approximately 40 per cent  of the total claims.