Facts of Insurance
In this article, we will discuss the general myths & facts about insurance and misunderstandings in the insurance market that discourage people from purchasing health or life insurance. In today’s world, acquiring health and life insurance is important for every individual, offering both financial and mental security. However, many people in India still withhold from investing in insurance, so let’s delve into the reasons.
Did you know that, according to 2021 data, out of India’s huge population of 1.4 billion, only 514 million people are covered by health insurance schemes? On the flip side, India’s major medical needs heavily depend on the private healthcare system, with 58% of hospitals being privately owned and 81% of doctors working in these hospitals. This makes it challenging for people to access affordable healthcare services.
Even today, more than 70% of Indians pay for their medical expenses out of their own pockets and are not covered by any government or private health scheme. The National Family Health Survey-3 reveals that 70% of urban and 63% of rural families completely depend on private hospitals, where healthcare services are significantly costlier than in government hospitals. These statistics highlight the difficulty and high cost of accessing quality healthcare in India. However, reaching good and affordable healthcare services is entirely possible through purchasing a health insurance policy. Despite this, the lack of education and awareness about health insurance in India has restricted its reach.
Myths and Facts Related to Insurance
Let’s now address the myths surrounding insurance that mislead people when they consider purchasing a policy:
- Myth 1: Some believe that if they smoke, they are ineligible for health insurance. This is not entirely true. Even if you smoke, you can obtain health insurance, but you may need to pay a little higher premium due to the increased health risks associated with smoking.
- Myth 2: Others think that if they have a pre-existing disease like diabetes, asthma, or a previous accident, they won’t be eligible for an insurance policy. However, insurance companies offer policies that cover pre-existing conditions after a waiting period, generally going from 1 to 4 years. Once this period is completed, your pre-existing conditions will also be covered.
- Myth 3: Many believe that insurance companies do not provide claims and often reject them. This myth is false. According to IRDAI’s report, the claim settlement ratio of the industry’s top companies exceeds 90%, meaning that over 90% of claims are settled by these companies.
- Myth 4: Some assume that health or life insurance is costly and only meant for the wealthy, not the middle or lower class. However, there are numerous companies in the market that offer affordable health and life insurance. This allows individuals to secure their financial future at a reasonable price.
- Myth 5: Some people think that insurance policies allow only a single claim, and they have to pay for medical expenses out of their pockets, with reimbursement from the company coming later. This is incorrect. With the right insurance policy, including features like cashless and restoration, you can have a completely cashless medical experience. Restoration features allow you to regain the coverage amount after making a claim, allowing you to make another claim within a specified period.
Conclusion
These myths & fact about insurance is statistics free light on why many Indians continue to ignore insurance and why they shouldn’t. As a responsible individual, safeguarding your future should always be a priority. If you are unsure about insurance, it’s advisable to consult an insurance expert to select the right policy based on your needs. If you have any more myths or questions, please feel free to share them.
