Health and Life Insurance Gaps, Risks Are Growing! Asia Gets $390 Billion Wake-Up Call

Across Asia, families are paying more out of pocket for healthcare and remain dangerously underinsured when it comes to income loss after death, despite growing awareness of the risks. Swiss Re’s latest report puts complex numbers to a worrying trend: the region’s combined health and mortality protection gap reached $390 billion in 2024, a sharp 26 per cent jump since 2017.

The health protection gap (HPG), defined as out-of-pocket healthcare spending that causes financial stress and is not covered by insurance or public schemes, stood at $258 billion in 2024. Meanwhile, the mortality protection gap (MPG), the shortfall between a family’s financial needs after the death of the primary earner and the actual cover in place, hit $132 billion. Both gaps have widened significantly over the past seven years, with emerging Asia accounting for the lion’s share.

The Widening Health Stress

What’s pushing the health protection gap upward? It’s a mix of rising medical inflation, ageing populations, and increasing demand for modern medical services. China leads in absolute numbers, with a $143 billion health gap, followed by India at $32 billion. In Japan, the largest gap among developed Asian economies ($24 billion) is being fuelled by chronic diseases and long treatment durations.

Notably, over 80 per cent of Asia’s total health and mortality gaps come from emerging markets. Insurance penetration remains low, public healthcare provision is stretched, and households are often forced to self-fund medical emergencies. According to Swiss Re, households in almost every surveyed country (except China) reported greater financial stress in 2024 compared to 2017 due to out-of-pocket healthcare costs.

China is an exception primarily because healthcare reforms, better insurance coverage and more accessible care have brought down the share of household financial stress. In contrast, India saw the sharpest rise in stress, a sign that improvements in coverage and affordability are lagging behind the country’s rapidly growing medical needs.

Mortality Protection: Income Growing, Cover Not

The mortality gap tells a similar story. As incomes rise and household debt increases, families across Asia have more to lose in the event of a sudden loss of income. Yet most still lack adequate life insurance. The mortality gap in Asia rose 35 per cent from 2017, with emerging markets contributing 81 per cent of the total $132 billion shortfall.

What is concerning is that this is not just a statistical issue; it has real-world consequences. When the main breadwinner dies, many households face an immediate collapse in financial stability, often with no safety net.

The Real Cost of Skipping Care

Beyond these gaps, the report also highlights a less-discussed yet highly critical metric, i.e., non-treatment due to unaffordability.

Healthcare unaffordability has pushed many families to not even seek medical treatments, for instance, in 2024, around $130 billion worth of care went unmet simply because many Asian families could not afford it.

Amidst this neglect, chronic diseases accounted for nearly 56 per cent of non-treatment costs. This means many families are skipping care for lifestyle and critical diseases such as diabetes, hypertension, and arthritis. The problem with these diseases is that, if left untreated for long, they can spiral into serious emergencies and the treatment cost for this can be huge.

What’s Holding Consumers Back?

The awareness is there. In Swiss Re’s survey of over 12,000 consumers across 12 Asian markets, nearly 60 per cent of respondents in emerging Asia expressed intent to buy life insurance within a year. However, that intent doesn’t always turn into action because of these main barriers:

• Perceived high cost of insurance

• Lack of awareness or product understanding

• Concerns about job security and cost of living

In advanced Asia, economic factors are holding its people back from securing insurance, while in emerging Asia, the fear of job loss is among the top concerns. In both cases, people are finding themselves squeezed financially wherein insurance often feels like a luxury rather than a necessity.