5 Per Cent Indians Have Neither Life Insurance Nor Health Insurance Coverage

In 2024, health insurance coverage improved marginally while a dip was seen in life insurance coverage, and alarmingly people who had neither coverage nearly doubled, according to the BankBazaar Moneymood report exploring personal finance trends. 

In 2024, 38 per cent had both life and health insurance, down 43 per cent from 2022. The percentage of people who had just life insurance declined from 39 per cent to 38 per cent during the same period. In contrast, according to US Census Bureau data, 92 per cent of people in the US had health insurance coverage. 

Also, the report revealed that 19 per cent had only health insurance ( up from 16 per cent in 2022), and 5 per cent had neither health nor life insurance.  In fact, those who do not have either health or life insurance have gone up from three per cent in 2022 to five per cent in 2024. 

The report reveals life insurance remains essential despite evolving trends. Opting for a term plan with coverage equal to 10-20 times your annual income ensures your family’s financial stability in your absence. For example, if your annual income is Rs 10 lakh, consider coverage of Rs 1-2 crore. Adding riders such as critical illness or accidental death benefits can enhance your protection. Remember that when buying life insurance, you should stay away from any product that mixes insurance with investment, even if it promises guaranteed returns. Such products provide inadequate coverage and at the same time give returns that do not beat inflation. So, buying a term plan and investing the rest in mutual funds is the smart thing to do. 

The importance of health insurance cannot be understated as healthcare costs are very high. In the metros, one should ideally have a family floater of at least Rs 10 lakh which covers the whole family. In smaller cities, a health cover of Rs 5 lakh for the family may be enough. You can also consider copayment and deductibles to lower your premiums but remember that in that case, you must pay a portion of the medical bills from your own pocket. 

It is important to remember that even before investing, you should protect your risks through insurance. Having a health and life cover is thus a must. It is recommended that you take the help of a financial planner.