2 out of 5 Indians have health insurance, gap worse in rural India: Report

Millions without adequate cover as awareness, affordability and access issues persist, it says

Only one in two Indians has life insurance and two in five are covered for health, according to a report by a group representing industry brokers.

 

Millions of people not having insurance leaves them financially exposed in times of need, according to the report called ‘Leading the Path to Insurance for All’ and published by the Insurance Brokers Association of India (IBAI).

 

The numbers on insurance coverage must be read in the context that over 90 per cent of Indians have bank accounts, according to the report.

 

Urban and wealthy Indians have some form of insurance cover but it’s often not enough. Those living in rural India or belonging to low-income groups are more likely to be without insurance.

 

 

What’s holding people back?

 

The IBAI report listed reasons why Indians don’t buy enough insurance:

 

Awareness: Many see insurance as an optional cost, not a necessary safety net.

 

Complexity: Insurance jargon, paperwork, and fine print discourage people from signing up.

 

Affordability: Lower-income households struggle with premium costs, especially when coverage doesn’t seem worth the price.

 

Access: Only 2 per cent of life insurance branches are in rural areas, despite rural India contributing nearly half the country’s GDP.

 

What Does This Mean for You?

 

Being underinsured means your family might face serious financial hardship in case of medical emergencies, accidents, or sudden death. According to the IBAI survey:

 

Most people want life cover that is 8-10 times their annual income

 

Yet, less than 10 per cent actually have that level of protection

 

How to fix the gap: Simple steps

 

Here’s how Indian families can protect themselves better:

• Start with a basic term life plan: It’s affordable and gives high coverage 
• Don’t skip health insurance: Even a small hospital bill can drain savings 
• Buy early: Premiums are lower when you’re young and healthy 
• Choose trusted advisors or brokers who can explain what you need