COVID-19 pandemic has led to a surge in demand for health insurance policies. In a country like India, where insurance penetration remains abysmally low, health insurance was never seen as a must-have.

Balachander Sekhar, Co-Founder, and CEO of RenewBuy.com talks on how the customer behaviour has changed towards health insurance; what are the most popular protection plans, and what is the ideal sum insured, during an interview with Nirmala Konjengbam. Edited excerpts.

How has the pandemic changed the customer's perception of health insurance?

COVID-19 pandemic brought in a shift towards the level of awareness in health insurance. The one positive impact of COVID-19 is health insurance, which was earlier seen as optional, has become inevitable from a consumer perspective. People are now more aware of the benefits of health insurance and how it reduces the financial burden in case of an emergency health crisis.

Remarkable growth has been seen amongst the millennials, who have invested for themselves as well as for their families. Men in the age group of 25 to 45 have been serious about health insurance policies for their families. There has been an increase in overall health insurance penetration by 33 per cent; with a three-fold increase in Tier 2 & 3 cities.

People are now keen on investing in comprehensive insurance plans, which include treatment for new diseases. These are not included in the regular health plans. Since April, there has been an increase in a comprehensive health plan by 35 per cent.

How health insurance will help in dealing with the financial crisis during a pandemic?

Health insurance, at any given day, helps in meeting the rising cost of medical care, whether it is related to COVID-19 or any other disease. While COVID-19 has taken the world by storm, there have been similar diseases like the Zika virus, Ebola, which were equally sudden and critical. While the life expectancy of people has increased, there is an increase in the number of high-risk diseases across the world.

Expansion and support from healthcare services, providing essentials during the lockdown, dealing with stress, and finding ways to reduce financial stress have all got complicated with no clear end to this pandemic. People with no health insurance might not be financially prepared to pay heavy medical bills in case the individual or his or her family contracts the virus. Coupled with the increase in job losses in the country, COVID-19 has made people financially weaker to meet immediate health crisis. Medical cost inflation has been estimated to be in double digits shortly. To top it all, nobody knows how grave the situation can be and how long it will last.

In India, health insurers have been rolling out focussed health insurance covers against COVID-19 in the last three months. With a premium of Rs 1,500 to 10,000; a family of four can be covered under the COVID-19 insurance plan.

What is the buying trend for the COVID-19 standalone health insurance plan?

As mentioned above, health insurers have been providing insurance cover against COVID-19. And there has been a significant rise in people investing in health insurance plans post the pandemic. Increasing risk aversion among consumers, a strong surge in demand for new COVID-19-related policies like Corona Kavacha and Corona Rakshak, Arogya Sanjeevni plans were the key drivers towards consumer investment. Health insurance-related queries have increased by 50 per cent in the last few months. The COVID-19 outbreak has boosted growth in the sector in a relatively under-insured market by increasing the health insurance penetration rate.

What is the average sum insured that should have opted for health insurance plans?

The average sum insured pre-COVID-19 situation was Rs 3 lakh, but there is a sudden jump in higher sum insured acceptance post-COVID-19. it is now averaging at 5 lakh. One should always opt for an adequate sum insured due to medical inflation rising at 15 to 20 per cent annually and COVID-19 like situation can further dent the pocket if one opts for a lower sum insured for self and family.