Amongst all the segments within the insurance industry in India, health insurance is perhaps the fastest growing verticals today. Millions of people in the urban centres of the country have already realised the critical significance of the health insurance plans for themselves and their loved ones.
The level of awareness is growing at a phenomenal pace. This is why, almost all the insurance companies which do not have health insurance portfolio so far are keeping an eye on the segment. This is true especially with life insurers. It is seen that almost every life insurance company is planning to spin off a separate company to offer health insurance services in India. Be it a public sector company or a private sector corporate mammoth, all are keeping health insurance in their high priority list.
Thanks to the new Insurance Act, it has brought about a number of reformatory measures to the table. The provision of launching a full-fledged health insurance company is one of the measures offered by the new Insurance Act.
Until last year, health insurance plans were offered under the segment of general insurance which was strange but true. But now a corporate house can launch a separate health insurance company in the market. This will allow companies to manage health insurance offerings in a much better manner and companies will also be able to launch more and better products for the ever expanding consumer base.
There was a time when life insurance companies were finding different ways to leverage the health insurance market. Even the Insurance Regulatory and Development Authority of India (IRDAI) had allowed life insurance companies to provide health insurance riders along with a life insurance plan. But this offering hardly worked for either companies or consumers. Now, there are reasons for life insurers to cheer. They can introduce new companies to offer mediclaim plans in the country. The sector is already growing in excess of 15-20 per cent year on year. And the most interesting fact is that this growth is coming mainly from major metro cities and tier 2 cities. There are hundreds of other urban centres and semi urban areas where the health insurance products are yet to register their penetration.
Nevertheless, there is a huge untapped market in India in the form of our Indian villages. Around 70 per cent of Indian population is still living in the countryside areas. So, just think what can be the size of the health insurance market when around 120 crore Indians become aware of this facility.
The role of health insurance is not just limited to providing coverage against the risk of ill health. The government of India has offered other incentives in the form of tax sops. Under section 80D of the Income Tax Act, one can claim tax deduction of up to Rs 20,000 a year towards payment of health insurance premium. If someone pays health insurance premium for his parents, even that is eligible for tax deduction under the Act!
Thus, keeping so many benefits in mind and the long term growth potential of the sector, life insurance companies are all set to foray into this sunshine industry with all their force. In the coming times, the health insurance market will see an intense competition among the old and new players at the end of which, the consumer will be the King!
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