Why so many Indians remain unprotected even with dozens of insurance options available
Despite broader awareness, digital access, and dozens of product choices millions of Indians remain financially vulnerable.
- Aug 4, 2025,
- Updated Aug 4, 2025 3:17 PM IST
It started with a headache. Then dizziness. Then collapse. By the time they reached the emergency room, his condition had deteriorated. The estimate handed to his wife: ₹2.5 lakh for just the first 48 hours.
She stood frozen not because of the amount, but because they had never bought insurance. They had planned to. But school fees, rent, and recurring family emergencies always took priority. They told themselves, “We’ll manage.”
That night, in a hospital corridor lit by vending machines and silence, reality hit: They weren’t just uninsured. They were unprotected.
A Healthcare Crisis Playing Out Across Indian Households
Their story isn’t unique. It’s playing out across India every single day.
According to NITI Aayog and the National Health Accounts (2023):
● 17 crore Indians spent more than 10% of their household income on healthcare last year classified as “catastrophic expenditure.”
● 6 crore people were pushed below the poverty line due to medical bills.
● And while more than 50 crore Indians have some form of health cover (largely due to government schemes), less than 20% are adequately insured with meaningful protection against real-world hospital expenses.
This isn’t about statistics. It’s about families selling jewellery, postponing surgeries, or borrowing from relatives just to survive a medical emergency. That’s the real cost of staying uninsured or underinsured in today’s India.
Why Are So Many Still Not Buying Insurance?
Despite broader awareness, digital access, and dozens of product choices millions of Indians remain financially vulnerable. Why?
1. “It’s too confusing.”
Words like co-pay, deductible, waiting period, and pre-existing exclusion can be intimidating. Most people buy policies without fully understanding what’s covered—and what's not. When the time comes to claim, they find themselves reading clauses instead of receiving care.
2. “I don’t trust them.”
We’ve all heard it: “They’ll find a way to reject the claim.” Stories of denied reimbursements and claim rejections spread faster than successful ones. The result? Mistrust, and hesitation to invest in protection.
3. “It’s too expensive.”
When every rupee counts, insurance feels like a cost without immediate return. Since benefits are invisible until needed it's often the first thing deferred to “next month.”
4. “I already have coverage… I think?”
Some believe employer-provided insurance or government schemes are enough. But most of these come with limits, co-pays, or exclusions and often don’t cover the whole family. False confidence leads to real consequences.
5. “It won’t happen to me.”
The most dangerous myth. We assume we’re too young, healthy, or careful to face emergencies. But lifestyle diseases, air pollution, unpredictable infections, and accidents are becoming more common even among younger demographics.
What Needs to Change?
To close the protection gap in India, we need more than products—we need a change in how we communicate, educate, and engage:
● Simplify the Language: We must explain insurance in plain terms not legal or financial jargon. Buying coverage should feel like making an informed life decision, not decoding a legal contract.
● Tell the Real Stories: We need to spotlight real families, not just claim settlement ratios. Show how timely coverage changed someone’s life. And yes, be honest about where it failed and why.
● Focus on Rural and Tier 2/3 India: Insurance awareness efforts must expand beyond urban metros. Rural India faces the dual challenge of low awareness and limited access both must be addressed.
● Digital Must Drive Inclusion, Not Complexity: As insurers move online, digital journeys must become simpler not colder. Tools, videos, and calculators should empower not overwhelm the first-time buyer.
Final Thoughts: Insurance Is a Promise—Not a Product
Buying insurance isn’t just about numbers. It’s about a silent promise: “If something goes wrong, my family will be okay.”
So if you’ve been putting it off—ask yourself: If something happened tonight, would my family be able to cope financially? If the answer is uncertain, it’s time to act.
Because protection doesn’t come from hope or habit. It comes from planning. From saying: “I may not control the emergency—but I will control the outcome.”
Get covered. Stay protected. Because peace of mind isn’t a policy feature. It’s the purpose of the policy itself.
( Views are personal; the author is Joint Chairman and MD, BajajCapital)
It started with a headache. Then dizziness. Then collapse. By the time they reached the emergency room, his condition had deteriorated. The estimate handed to his wife: ₹2.5 lakh for just the first 48 hours.
She stood frozen not because of the amount, but because they had never bought insurance. They had planned to. But school fees, rent, and recurring family emergencies always took priority. They told themselves, “We’ll manage.”
That night, in a hospital corridor lit by vending machines and silence, reality hit: They weren’t just uninsured. They were unprotected.
A Healthcare Crisis Playing Out Across Indian Households
Their story isn’t unique. It’s playing out across India every single day.
According to NITI Aayog and the National Health Accounts (2023):
● 17 crore Indians spent more than 10% of their household income on healthcare last year classified as “catastrophic expenditure.”
● 6 crore people were pushed below the poverty line due to medical bills.
● And while more than 50 crore Indians have some form of health cover (largely due to government schemes), less than 20% are adequately insured with meaningful protection against real-world hospital expenses.
This isn’t about statistics. It’s about families selling jewellery, postponing surgeries, or borrowing from relatives just to survive a medical emergency. That’s the real cost of staying uninsured or underinsured in today’s India.
Why Are So Many Still Not Buying Insurance?
Despite broader awareness, digital access, and dozens of product choices millions of Indians remain financially vulnerable. Why?
1. “It’s too confusing.”
Words like co-pay, deductible, waiting period, and pre-existing exclusion can be intimidating. Most people buy policies without fully understanding what’s covered—and what's not. When the time comes to claim, they find themselves reading clauses instead of receiving care.
2. “I don’t trust them.”
We’ve all heard it: “They’ll find a way to reject the claim.” Stories of denied reimbursements and claim rejections spread faster than successful ones. The result? Mistrust, and hesitation to invest in protection.
3. “It’s too expensive.”
When every rupee counts, insurance feels like a cost without immediate return. Since benefits are invisible until needed it's often the first thing deferred to “next month.”
4. “I already have coverage… I think?”
Some believe employer-provided insurance or government schemes are enough. But most of these come with limits, co-pays, or exclusions and often don’t cover the whole family. False confidence leads to real consequences.
5. “It won’t happen to me.”
The most dangerous myth. We assume we’re too young, healthy, or careful to face emergencies. But lifestyle diseases, air pollution, unpredictable infections, and accidents are becoming more common even among younger demographics.
What Needs to Change?
To close the protection gap in India, we need more than products—we need a change in how we communicate, educate, and engage:
● Simplify the Language: We must explain insurance in plain terms not legal or financial jargon. Buying coverage should feel like making an informed life decision, not decoding a legal contract.
● Tell the Real Stories: We need to spotlight real families, not just claim settlement ratios. Show how timely coverage changed someone’s life. And yes, be honest about where it failed and why.
● Focus on Rural and Tier 2/3 India: Insurance awareness efforts must expand beyond urban metros. Rural India faces the dual challenge of low awareness and limited access both must be addressed.
● Digital Must Drive Inclusion, Not Complexity: As insurers move online, digital journeys must become simpler not colder. Tools, videos, and calculators should empower not overwhelm the first-time buyer.
Final Thoughts: Insurance Is a Promise—Not a Product
Buying insurance isn’t just about numbers. It’s about a silent promise: “If something goes wrong, my family will be okay.”
So if you’ve been putting it off—ask yourself: If something happened tonight, would my family be able to cope financially? If the answer is uncertain, it’s time to act.
Because protection doesn’t come from hope or habit. It comes from planning. From saying: “I may not control the emergency—but I will control the outcome.”
Get covered. Stay protected. Because peace of mind isn’t a policy feature. It’s the purpose of the policy itself.
( Views are personal; the author is Joint Chairman and MD, BajajCapital)