Low demand for health insurance plans among senior citizens during pandemic

Even as the demand for health insurance in the country peaked due the ongoing pandemic, data from insurance aggregator Policybazaar.com suggests that purchase of health policies by the senior citizen category was lower than in other age categories.

According to data shared by Policybazaar.com to Business Standard, the share of policies bought by the senior citizen category in the age-group 60-80 years stands at only 15 per cent, whereas the share for the younger lot in the age bracket of 18-40 years was found to be 45 per cent. This is despite the old people being tagged as more vulnerable to the virus than the younger generation.

Furthermore, the share of health policies bought by children for their parents stands at 12.2 per cent for the April-Dec 2020 period. To add to that, around 41 per cent of people in the senior citizen category who bought a cover opted for a sum assured for Rs 5 lakh. Around 24 per cent preferred to buy a health cover with a sum assured of Rs 5- 10 lakh. And, the higher sum insured policies of beyond Rs 20 lakh saw uptake from 20 per cent senior citizens.

Amit Chhabra, Business Head – Health, Policybazaar.com said, “The main reason for lower uptake of health policies among senior people is awareness. They are not aware that they can get health insurance at that age”. “Affordability is another major concern and this is all the more applicable to retired people. They don’t think they can afford a health insurance policy”, he added.

However, with the regulator allowing payment of insurance premiums via EMIs, it has become more affordable for a large section of the population to afford health insurance. Experts also pointed, the fact that during the pandemic, due to the restrictions on movement, the agency force was not as active as they are otherwise. Also, typically, it has been seen that people in the senior age group need assistance when it comes to investing in insurance products.

“We are seeing a trend now where children are buying comprehensive health insurance plans for their parents so that remain covered at senior age”, Chhabra added.

In the wake of the pandemic, demand for health products went up significantly. More importantly, this spike in demand was largely driven by retail health which in turn was aided by the launch of two covid specific products (Corona Kavach and Corona Rakshak) by the regulator. These were relatively cheaper than the comprehensive health products and saw a huge uptake among retail consumers. However, data till September 2020 showed, of all the policies covid specific policies, senior citizens accounted for about 7 per cent of lives covered under Corona Kavach policy and four per cent of lives covered under Corona Rakshak and other such products.

Source: Business Standard