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10 Factors That Are Keeping Indians Away from Health Insurance

Team AckoJan 18, 2024

In India, a major portion of the population remains uninsured when it comes to health insurance. Despite the rising healthcare costs and the importance of having financial protection against medical emergencies, many Indians choose not to buy health coverage. There can be several reasons for it, this article covers some of the apparent ones.




Possible reasons for lack of health insurance penetration

Although the pandemic has created a lot of awareness about one’s health and the benefits of insurance, still there’s a long way to go when it comes to health insurance penetration, especially in the interiors of the country. Let's explore the ten possible reasons behind this trend along with their counterpoints that signify a positive change.  

1. Perceived high cost

One of the primary reasons that keeps Indians away from health insurance is possibly the perception of high cost associated with it. Many individuals believe that the premiums are unaffordable. This misconception deters them from exploring health insurance options and leads to a significant number of uninsured individuals.

Counterpoint: While rising medical inflation does have an impact on health insurance premiums, you do not need to opt for a policy with the maximum sum insured. For example, the ACKO Platinum Health Plan comes with a starting sum insured of INR 10 lakhs, and therefore is affordable. 

2. Lack of awareness

The lack of awareness and education about the benefits of health insurance is another major factor. Many Indians, especially in rural areas, have limited knowledge about health insurance and its importance in safeguarding against healthcare expenses. This lack of awareness creates misconceptions and doubts, further discouraging people from seeking health insurance coverage.

Counterpoint: With several government-backed insurance schemes, insurance awareness is growing. Also, digital-first insurers like ACKO are using technology to simplify insurance and make it more accessible.

3. Limited trust

Trust plays a crucial role in the adoption of health insurance, and unfortunately, there seems to be a prevalent lack of trust in insurance companies among many Indians. Concerns about claim settlement procedures, hidden terms and conditions, and a general distrust towards insurance providers contribute to the low uptake of health insurance policies.

Counterpoint: Apart from traditional mediums, websites, apps, social media, newsletters, etc., are some tools through which tech-based insurers are ensuring transparency and educating potential and existing policyholders about insurance policies.

4. Inadequate coverage and exclusions

The limited coverage provided by certain health insurance policies can come across as a significant deterrent for Indians. Some policies may have numerous exclusions and waiting periods, making individuals unsure about the extent of coverage they would receive in case of medical emergencies. 

Counterpoint: ACKO’s Platinum Health Plan offers wide-ranging coverage. For example, it features zero initial waiting period, zero co-pay, no room rent, and much more.

5. Cultural mindset

The cultural mindset and societal beliefs also contribute to the low adoption of health insurance in India. In some cases, there is a perception that seeking health insurance is unnecessary because of the traditional support system where family and community members come together to provide financial assistance during medical emergencies.

Counterpoint: While this support system is valuable, it has limitations when it comes to rising healthcare costs and complex medical treatments. Also, with the rise in nuclear families, it is best to avoid over-reliance on the social set up regarding finances related to one’s health.

6. Lack of customisation options

Standardised health insurance policies often fail to address the unique healthcare needs and preferences of individuals. The lack of customisation options prevents individuals from tailoring their coverage to align with their specific requirements. This lack of flexibility makes health insurance less attractive to potential policyholders.

Counterpoint: Modern health insurance policies do offer several customisation options involving sum insured, people to be covered, option to go for top-up plans, etc.  

7. Limited access and infrastructure

There is limited access to healthcare facilities and infrastructure in several areas in India. The lack of hospitals and clinics, coupled with inadequate medical facilities, dissuades individuals from considering health insurance as a viable option. The absence of proper healthcare infrastructure poses a significant barrier to health insurance adoption.

Counterpoint: Telemedicine has the potential to solve the issue of limited access and infrastructure to a great extent. For instance, we enable hassle-free doctor consultations via our app.

8. Complex claim procedures

The daunting and lengthy process involved in filing and settling claims can be discouraging, especially for individuals who are already dealing with the stress of a medical emergency.

Counterpoint: Simplifying the claim procedures can encourage more Indians to opt for health insurance. Here, app-based claim settlements like those offered by ACKO can go a long way in reducing complexities and ensuring quick claim resolutions.  

9. Perceived low value

Some individuals perceive health insurance as offering low value for the premium paid. They may believe that the benefits provided by health insurance do not outweigh the cost of the premiums. This perception leads them to prioritise other expenses over health insurance, resulting in a low adoption rate.

Counterpoint: Unfortunately, one health emergency has the potential to wipe out people’s savings. Health insurance can ensure that your savings stay intact in case of a medical emergency.

10. Lack of faith in healthcare system

Lastly, the lack of faith in the healthcare system itself contributes to the low adoption of health insurance. Some individuals have concerns about the quality of healthcare services, the availability of doctors and specialists, and the overall reliability of the healthcare system. This scepticism makes them less inclined to invest in health insurance.

Counterpoint: We strive to change the perceived negativity around health insurance in India with our products and services. With extensive coverages and more than 7,000 cashless hospitals, you can rest assured about receiving top-notch health insurance services.

Frequently Asked Questions (FAQs)

Here are some FAQs regarding what’s keeping Indians away from purchasing comprehensive health insurance.


What are the benefits of health insurance?

Health insurance offers several benefits, including financial protection against medical expenses, access to quality healthcare services, coverage for hospitalisation, surgeries, and medications, and the ability to manage healthcare costs effectively.

Are there affordable health insurance options in India?

Yes, there are affordable health insurance options available in India like those offered by ACKO. 

What factors should I consider when choosing a health insurance policy?

Consider factors such as coverage options, premium rates, waiting periods, network of empanelled hospitals, claim settlement procedures, and additional benefits like maternity coverage and coverage for pre-existing conditions.

What should I do if while buying health insurance I have a pre-existing medical condition?

In such a situation, it is essential to disclose the conditions while applying for health insurance.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet, and is subject to changes.

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