51% of health insurance holders are underinsured: Apollo Munich

Almost 51% of health insurance policyholders in India are underinsured despite a steady rise in the policy sold, a report Apollo Munich Health Insurance said.

At 52%, men are more underinsured, that is, they have purchased low sum insured health insurance policies that would not suffice in medical emergencies, it said.

Although the number of health insurance policyholders in India is increasing annually, people most often choose the lowest sum insured policy, without comprehending the entire process of choosing an appropriate cover, it said.

Some of the reasons are lack of awareness about how to pick the right sum insured, overdependence on corporate health insurance coverage, willingness to pay a premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc, it added.

Speaking about the study, Antony Jacob, CEO, Apollo Munich Health Insurance, said that on the one hand India faces a challenge of lack of health insurance penetration, on the other hand those who have health insurance are underinsured.

"Underinsurance is a somber problem as it not only results in increased stress and sudden out of pocket expenditure for policyholders during times of medical exigencies, but also gives them a false sense of assurance of being covered," it said.

People must understand that health insurance is not just a tax saving tool, and therefore be mindful while choosing a sum insured for themselves and their family, it said.

Apollo Munich studied around seven lakh health insurance policyholders spread across 82 cities in India, and has found that both men and women across metros, tier 1 and 2 cities and towns are underinsured.