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Medical costs are becoming a major financial burden for Indian households, taking up an average of 12.2 per cent of their monthly incomes, according to a recent survey report by Policybazaar.
This makes healthcare spending the second-largest expense for families, coming just after essential needs like groceries, commuting, and school fees, which account for 31 per cent of household budgets. It said "Medical expenses are eating away 12.2% of household incomes on an average, which is second only to essentials like groceries, commuting and school fees" The report highlighted that rising healthcare costs are putting significant pressure on household finances, especially in the absence of adequate health insurance coverage. Surprisingly, the report also noted that the households spend only 3 per cent of their income on mandatory insurances like car and bike insurance, while medical costs continue to rise sharply. One of the key findings of the report is that affordability remains the biggest barrier to adopting health insurance. Among those who have not purchased health insurance, 31 per cent said the premiums were too expensive, while 26 per cent mentioned a lack of funds as the reason for staying uninsured. However, the study also pointed out a positive trend--many people who start out looking for low-cost health insurance eventually choose policies with more comprehensive features. This shows that consumers are becoming more value-conscious and not just focused on the cheapest options. Beyond financial constraints, a lack of understanding also prevents people from buying health insurance. About 20 per cent of respondents admitted they don't fully understand how health insurance works, and 18 per cent found the purchase process too complicated. Another 16 per cent said they were confused by the large number of policy options available. The report also revealed that many Indians continue to underestimate their healthcare needs. Nearly 48 per cent of policyholders have chosen coverage of Rs 5 lakh or less, which may not be enough in case of a serious medical emergency. Furthermore, 47.6 per cent of Indians are still unaware of term insurance and its benefits, indicating a significant gap in financial awareness and planning. The findings highlighted the urgent need for better awareness, simpler products, and more affordable insurance solutions to help families manage rising healthcare costs. (ANI)
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