In a country like India, where maximum medical expenses are borne by individuals themselves , planning for health expenditure needs to be inculcated. Unpredictable major illnesses may require substantial amounts of money at a short notice. Such illnesses are, in fact, estimated to be impoverishing India’s population every year. 

 

Illness, in fact, has the potential for catastrophic effects on the finances of individuals and their families, and hence the importance of planning for health needs.

 

Health Insurance products available in the Indian market have been dominated by hospitalization products, which protect individuals from the high expenditure in the event of an hospitalization. With the ever- increasing costs of healthcare, newer and more expensive health technology and newer generations of pharmaceuticals, bearing the financial burden of a major health episode is becoming increasingly difficult for the uninsured, even the relatively well-off. 

 

Thus, health insurance is not only important for financial access to healthcare, but also for preservation of savings, which may otherwise be wiped out. The cashless system of providing hospitalization cover has immense value in terms of personal finance, as it obviates the need to arrange a large amount of money for hospitalization, even if reimbursed later. The security of cashless hospitalization also minimizes the need to keep surplus liquidity or encashable investments to meet health eventualities.

 

With increasing awareness of this protective role of health insurance, and with renewed focus on marketing of health insurance products on the part of insurers in that de tariffed regime, the health insurance portfolio is now the fastest growing market segment for non life insurance sector in India. There is tremendous potential for growth, as only 5% of the population has been covered by commercial health insurance.

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