Insurance is a risky business. I feel that in India awareness of insurance is not that great. The importance people give for medical insurance is far lesser than that for life insurance. While they worry about what happens when they are gone, they fail to give adequate thought about the mishaps that could happen while they are living. The probability of dying in accident is much lower than getting severely injured but not-dying. Many people go out of job for a longer duration due to accidents or some chronic diseases. Just by comparing the number of people (who I know) having life insurance with that of medical insurance, it seems that people are more worried about mortality than the morbidity. I think it is mainly because of the unawareness of what a medical insurance is. Even today in rural areas insurance to them is LIC. That’s it.
To me, medical insurance is more important than a life insurance because it aids me during my life-time. I do not want to spend all my savings on medical expenses. Well, there are some life insurance plans which cover chronic diseases too, let us leave that out for this argument.
A recent news states that Health insurers in India have been paying Rs.125 as claim for every Rs.100 paid as premium. That has resulted in hikes in medical insurance premium. I believe that the main cause for this is that the number of people having medical insurance is far less. To my knowledge, salaried people who are working for some established companies have group health insurance. Apart from that may be people with good awareness would have medical insurance cover. That’s it. There is a huge crowd of people with no sufficient knowledge about medical insurance.
Only when large number of people gets medical insurance the premium will be lower as the claims pay out would be made break-even by the amount paid as premium.
As per a statistics from census bureau of US, the percentage of people without health insurance coverage in US in 2005 is 15.9%. I couldn’t get a similar data for India to compare. But I am sure that it would be somewhere in seventies or eighties. In US there is a constant crib about medical insurance not giving adequate coverage to all kinds of diseases (like the one comes in the movie John Q). Here in India, the case is entirely different.
As a business, I think health insurance companies in India have lot of untapped market. With a proper awareness camps and advertisements they can get a great business. I don’t even remember seeing TV commercials for health insurance.
I used to tell my friend 4 years back that I want to start a medical insurance company in India as it has a very good untapped market. I feel that this holds good even today. But starting an insurance company needs a great capital. Given a chance I would start a health insurance company and my primary market would be rural areas.
By the way, do you have medical insurance for you and your family? Click here to learn about various options you have for health insurance in India.
To me, medical insurance is more important than a life insurance because it aids me during my life-time. I do not want to spend all my savings on medical expenses. Well, there are some life insurance plans which cover chronic diseases too, let us leave that out for this argument.
A recent news states that Health insurers in India have been paying Rs.125 as claim for every Rs.100 paid as premium. That has resulted in hikes in medical insurance premium. I believe that the main cause for this is that the number of people having medical insurance is far less. To my knowledge, salaried people who are working for some established companies have group health insurance. Apart from that may be people with good awareness would have medical insurance cover. That’s it. There is a huge crowd of people with no sufficient knowledge about medical insurance.
Only when large number of people gets medical insurance the premium will be lower as the claims pay out would be made break-even by the amount paid as premium.
As per a statistics from census bureau of US, the percentage of people without health insurance coverage in US in 2005 is 15.9%. I couldn’t get a similar data for India to compare. But I am sure that it would be somewhere in seventies or eighties. In US there is a constant crib about medical insurance not giving adequate coverage to all kinds of diseases (like the one comes in the movie John Q). Here in India, the case is entirely different.
As a business, I think health insurance companies in India have lot of untapped market. With a proper awareness camps and advertisements they can get a great business. I don’t even remember seeing TV commercials for health insurance.
I used to tell my friend 4 years back that I want to start a medical insurance company in India as it has a very good untapped market. I feel that this holds good even today. But starting an insurance company needs a great capital. Given a chance I would start a health insurance company and my primary market would be rural areas.
By the way, do you have medical insurance for you and your family? Click here to learn about various options you have for health insurance in India.
7 comments:
I feel that the reason for very less number of Medical Insurance is the way the Medical Profession is established.
Especially, among the middle class and lower class, the doctors are viewed more like friends or relatives. The formal methods of getting the receipts will not work out. But these are compulsory for Medical Insurance.
For example, when I visit my dentist, he chats with my father about family issues for about 20 minutes. In many villages, there are doctors who still give 'Red tablets - 4', 'White Oval tablets -2'. Also, I have seen doctors who get rice and fruits, as fees.
There are many villagers who insist on being out patients. They do not want to stop farming even for a single day.
These factors will not allow the formal ways of bills, receipts, detailed medical reports, etc.
If the Insurance company relax their rules, then there is a possibility of more number of Medical Insurance policies..
'Insurance company relaxing the rule' is like giving medicine to the symptom instead of the cause. I think the education on the importance of bills is what required.
Actually there is a cash-less option which medical insurers offer. All you need is a card. You don't have to carry cash nor bills. Hospitals work with medical insurance companies to get their bills paid. At present, there aren't many hospitals in such network. Primary reason is the one you pointed out correctly...not many hospitals give proper receipts. Reason for not givig is so obvious...tax evasion.
Seeni,
I really agree with you. First of all I have third party medical insurance other than the insurance provided by my company.
Most of the people want to invest in Stocks, MFs, PPF, NSC, etc. I would say that the best part of saving our money would be in the form of Medical Insurance.
Just like stopping the stock loss , we can invest a small amount in Medical insurance that gives you the huge returns in terms of medical expenses. Also it provides tax benefit too.
I had an experience when my father admitted in private hospital and I didn’t spend a single Rupee from my pocket.
So as you said, Everyone should aware of this one.
We need more awareness camp for this one. I think most of the medical insurance companies want to make profit by providing benefit to wthose who already employed. But they are not giving enough importance to individuals.
Also one point I have noticed with Medical Insurance companies. If you get medical insurance through your company, they won’t ask for the pre medical test.
But if you go as an individual, I am sure they will ask for all the medical test reports.
So my point is, before you invest in anything , stop you medical expenses loss -
Babu, very well said. Spending for medical insurance is more important than for for other investments.
One thing..it may not be possible for us to educate our entire society about the importance and benefits of medical insurance. But what we could do is to educate our close friends & relatives and persuade them to go for medical insurance.
(I am getting more self-motivation in starting my own medical insurance company and use 'referral marketing' as one of the marketing strategies.)
Until I came to USA I was unaware of Medical Insurance. Even now I do not have much information about Indian Medical insurance. Unlike life insurance medical insurance lack the following.
1. Proper marketing (Reach to people)
2. Coverage (Not all hospital take insurance).
3. People's mind toward ROI. I am not sure whether term life policies will be hit in India as there is no return of money.
4. Majority of crowd is not a company worker which may force them to take individual policies which might bring their premium to a substantial amount.
1 - 3, can be overcome by constant marketing. For 4 I am not sure what can be the strategy that should be followed.
Yeah Barani I also wasn't aware of the importance of Medical Insurance until I went to US.
I think government should order that all PAN card holders must have medical insurance and all registered hospitals should accept medical insurance.
Slowly Government should make everyone to hold a PAN card. (like an SSN).
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