Health insurance: 63% policyholders unable to switch from their plan — Here’s why and key things to keep in mind | Mint
Health insurance: 63% policyholders unable to switch from their plan — Here’s why and key things to keep in mind
An analysis by CoverSure showed that besides under-penetration of health insurance, another growing problem for many policyholders is that coverage exists but as many as 63% are unable to switch plans
Expanding insurance reach in the country is no longer the only concern that the sector faces, according to an analysis by CoverSure of policyholders in India. It found that a quieter problem has risen, coverage that exists but no longer fits
Data from the platform showed that as many as 63% of policyholders who wanted to switch to a better health plan couldn’t do so due to certain factors. Further, even among those without barriers, close to half remain on basic and non-comprehensive plans despite being fully eligible to upgrade.
Further, a majority of policyholders aged 50 and above carry inadequate coverage of less than ₹5 lakh. The emerging challenge is thus not whether people are purchasing insurance, but whether the insurance already held continues to serve the people holding it, the analysis report noted
Locked out of better health coverage? Data shows…
According to CoverSure’s Policy Health Check, a majority of India’s insured population is “either locked out of better coverage or has yet to pursue it”. The insights come from analysis of more than 1 lakh policyholders, as follows:
Gap created by lack of awareness, not access: About 49% of existing policyholders with no pre-existing conditions (medically eligible and in position to upgrade), still hold basic, non-comprehensive plans. “The gap here is not one of access. It is one of awareness and engagement. Many policyholders simply do not revisit their insurance after buying it, and so coverage that was adequate at one point in life quietly becomes inadequate as circumstances change,” the report noted
Barriers hinder migration or portability: The data further showed that 63% of policyholders who wanted to switch to a better health plan were unable to do so — largely due to pre-existing conditions. Such factors make migration or portability difficult even when intent exists, the report noted, adding that what has changed here is their health and thus their options
Coverage depth a concern: The report said that while one-third of policyholders hold a sum insured of around ₹10 lakh, a majority of those above 50 years of age carry coverage below ₹5 lakh — far below what a single hospitalisation could cost.
“Among policyholders already living with chronic conditions, 17% hold less than ₹5 lakh in sum insured. These are individuals who are statistically more likely to be hospitalised, and yet hold coverage that a single admission in a tier-1 city can wipe out entirely,” it added
Health, medical conditions a big factor: Of the policyholders assessed, around 35% reported having a medical condition.
- Of policyholders with lifestyle-related ailments, diabetes, hypertension, high cholesterol, and thyroid disorders, nearly 69% fall within the 30 to 54 age band — the years when these conditions most commonly surface and when financial responsibilities are at their peak.
- The 50 to 54 age group alone accounts for the single largest share at 18.1%, closely followed by the 40 to 44 and 55 to 59 bands, each at 14.9%.
- These are conditions arriving during peak earning years, at a stage of life when coverage gaps carry the highest financial and personal consequences.
Silver lining: Younger policyholders proactive
“Buying insurance is a starting point, not a destination. A policy that was right at 32 may leave someone dangerously under protected at 35. Healthcare costs are rising, and lifestyle conditions are arriving earlier than most people expect,” Saurabh Vijayvergia, Founder & CEO, CoverSure said in the report
He warned that the danger here is that policyholders “rarely discover these gaps on their own; they discover them during a medical event, when it is already too late to change anything”
The report thus noted that the younger cohort showed encouraging signs. People aged between 30 and 40 years old comprised nearly 41% of those analysed, with those under 30 another 10% of the respondents
The data for this demographic showed that younger policyholders appear to be engaging proactively with their existing coverage and questioning if it is sufficient… “a shift that, if sustained, could meaningfully change how India’s insured population relates to its policies over time,” the report added
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions
About the Author
Jocelyn Fernandes
Jocelyn Fernandes is a journalist and editor with nearly 13 years of experience covering the business, corporate, economy and markets beats in news.<br>
As chief content producer for around three years at Livemint (Hindustan Times), Jocelyn publishes breaking stories, explainers, features and live blogs on a range of business and economy topics, including the Budget, corporate developments, stock markets, income tax, money and personal finance, cryptocurrency, government policy, impact of US tariffs, international developments and more.<br>
Jocelyn’s writing philosophy is focused on delivering news in an accurate and accessible format for readers. She thus focuses her news coverage on explainers and FAQs in order to breakdown business, corporate, economic, and policy topics that are of importance to everyday readers.<br>
She holds a Bachelors in Mass Media (BMM) and Post Graduate Diploma (PGD) in Journalism and Communication and has previously written for online business and markets news site Moneycontrol (Network18), Business-to-business (B2B) trade publications — the industry magazines Power Today and Solar Today (ASAPP Media), and the national news agency United News of India (UNI).<br>
Outside of work, Jocelyn keeps up-to-date with local and international news, enjoys reading fiction books, novels and short stories, and enjoys movies, travelling and art.
<br> She can be found on X and LinkedIn, and reached by email: <a href=”jocelyn.fernandes@htdigital.in”>jocelyn.fernandes@htdigital.in</a> <br> X/ Twitter handle: <a href=”https://x.com/scribeJocelyn”>@scribeJocelyn</a> <br> LinkedIn: <a href=”https://in.linkedin.com/in/jocelyn-fernandes-journalist”>LinkedIn</a>
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