High premiums, low funds key barriers to buying health, term insurance

A survey of nearly 4,000 individuals, conducted by India’s leading insurance aggregator Policybazaar, revealed that 31 per cent of respondents cited high premiums, and 26 per cent pointed to insufficient funds as the primary reasons for not purchasing health, and term insurance.

 

According to the “How India Buys Insurance” report, about 83 per cent of the respondents surveyed said they are aware of the need for a health insurance policy, but only 19 per cent actually own one, showing a gap between intent and ownership. While there is an increase in inclination towards health insurance, 30 per cent of the respondents neither own such a policy nor do they intend to buy it in the future.

 

 

Lack of funds and trouble understanding products were cited as major deterrents to buying health insurance policy, according to the report. About 20 per cent of the respondents said they do not fully understand health insurance, and 18 per cent saw buying it as a cumbersome process.

 

When it comes to term insurance, nearly 48 per cent of respondents are still uninformed about the benefits, and only 9.6 per cent of the respondents own it. However, there is a growing interest for the product among the customers, the survey noted. Limited understanding of personal finance is a key reason behind lack of term insurance adoption.

 

Lack of sufficient funds is a concern with term insurance as well. While 35 per cent of respondents cited it as a reason, 27 per cent found high premiums to be a deterrent. On the other hand, 48 per cent said product and process complexity is restraining purchase of term insurance policy.