The costs of medical treatment and hospitalisation costs have been increasing at a very fast pace. They have been increasing at such a fast pace that a lot of people end up borrowing money to pay these costs.

The Central Bureau of Health Intelligence recently conducted the National Health Profile 2018 survey which clearly shows that the hospitalisation expenses are so high that 1 out of every 4 people staying in Rural India and 1 out of every 5 people staying in Urban Areas end up borrowing money to pay for the treatment and hospitalisation costs.

In some cases, the hospitalisation cover is that big that people have to sell their physical assets to pay for the hospitalisation cover.

The expenditure on healthcare is increasing and is expected to rise at a fast pace. India currently spends only 1% of its GDP as healthcare expense whereas in high income countries, this spend is more than 5%.

Health Insurance Penetration in India

The study conducted by the Central Bureau of Health Intelligence also revealed that less than 15% of India’s 132 Crore population is covered by Health Insurance. And most of this 15% is provided by the Govt to its employees.

More than 85% of India’s population does not have a health insurance plan and bears the hospitalisation costs through self-financing. And it is these people who end up borrowing money to pay for the unplanned hospitalisation costs.

However, with increase in education levels and awareness – this will change as more and more people start opting for Health Insurance.

If there is proper awareness on the need of a health insurance policy and its benefits, the penetration for health insurance policies in India would certainly increase as larger number of people would start opting for a health insurance policy.

Benefits of Health Insurance Policy

There are various benefits of enrolling for a health insurance policy. The major benefit of enrolling for and paying premium to a health insurance company in India are as follows:

  1. Hospitalisation and Treatment:

If the person insured or any of his family members (in case of a group plan) fall sick, the health insurance provider would pay for all the hospitalisation costs as well as the treatment.

The premium to be paid for securing the health of a person is usually very low as compared to the actual expenses which a person may have to incur for any treatment. And therefore, it makes complete sense to opt for a health insurance policy.

  1. Tax Benefits

The government is also trying to encourage people to opt for a health insurance plan and therefore offers tax benefits to people who enroll for the health insurance plan.

The premium paid by the person can be claimed as a tax deduction in the ITR which reduces the tax liability.

  1. Health Check-up Benefit

The individual health plan also provides for a free health check-up every 4 years. The process for availing the same may vary from one insurer to another, but one thing remains the same and that is, the test results do not impact your current policy premiums.