5 reasons why many people avoid purchasing a health insurance policy

New Delhi: Health insurance plays a vital role in providing individuals with financial protection against unexpected medical expenses. By offering coverage for hospitalization, treatments, and medications, it ensures that people can access essential healthcare without facing overwhelming costs.

Despite the significance of health insurance, it is surprising that many individuals choose to forego purchasing a policy. This decision leaves them exposed to substantial financial risks and potential hardships in the face of unexpected medical expenses.

The possible five primary reasons for such behaviour could be:

Money problems

Financial constraints represent a significant reason why people tend to forgo purchasing health insurance. For those living paycheck to paycheck or dealing with tight budgets, health insurance premiums can be perceived as an added financial burden.

Frequently, individuals opt not to acquire a health insurance policy due to the associated costs, including premiums, deductibles, and co-pays. This can pose a challenge, particularly for individuals or families on a tight budget, as these expenses cumulatively make health coverage difficult to afford.

The Indian market is largely dominated by policies that offer returns, mainly because of the widespread awareness of life insurance.

Since health insurance policies solely focus on risk coverage without any return component, many individuals do not give serious thought to buying health insurance. They often perceive it as a wasteful expenditure of money.

Nonetheless, it is of utmost importance to acknowledge that the expenses of medical treatment without insurance can be substantially higher, potentially resulting in financial hardships and indebtedness.

Misconstrued good health

Certain young and healthy individuals hold the belief that they are unlikely to require medical services, while others perceive themselves to have a low risk of encountering medical issues, which reduces their inclination to purchase health insurance.

Furthermore, an increasing belief in India that “Nothing will happen to me and my family” leads people to avoid investing in health insurance, viewing it as an unnecessary financial burden.

While maintaining a healthy lifestyle is crucial, unexpected accidents or sudden illnesses can strike at any moment, leaving individuals financially vulnerable if they lack insurance coverage.

Underestimating the importance of insurance 

A significant factor contributing to the decision to forgo purchasing a health insurance policy is the lack of understanding about its coverage and advantages.

This issue is particularly prominent in smaller areas of the country where people have limited awareness regarding health insurance and its benefits.

Even for those who are aware, finding and purchasing the right insurance policy can be challenging due to limited availability and accessibility. The policies offered in these regions and cities may prove to be unaffordable for them, considering their income capacity.

As a result, in Tier 2/3 cities and beyond, many individuals choose alternative healthcare options, rely on government-funded programs, and take part in health cost-sharing ministries or cooperatives, instead of opting for traditional health insurance.

Depending on employer-provided coverage

Some people solely rely on their employer-provided health insurance, assuming it will be enough to meet their needs. While these employer-sponsored plans can be advantageous, they might not cater to the unique requirements of every individual.

To ensure continuous protection, it is essential to evaluate the comprehensiveness and portability of employer-provided coverage and consider supplementing it with individual policies. By taking these steps, potential coverage gaps can be addressed, and ongoing security for one's health needs can be ensured.

Ignorance about available options

A lack of awareness regarding the diverse range of health insurance options available is a contributing factor to the decision to forego purchasing a policy. Many individuals may not be familiar with the various plans, levels of coverage, and customization options offered in the market.

Moreover, comprehending the nomenclature, coverage options, benefits, exclusions, and other terms and conditions of insurance can be overwhelming for individuals. This lack of understanding often leads to confusion, delaying the decision-making process.

Insufficient coverage exposes individuals to the possibility of incurring significant medical expenses, leading to financial hardships and debt. It is vital for individuals to prioritize health insurance as a fundamental aspect of their financial planning to protect their well-being and ensure a secure financial future.