Insurance Awareness Day: Experts say it's time to simplify and educate to improve health insurance penetration

New Delhi [India], June 28 : On the occasion of Insurance Awareness Day, several insurance providers and experts in an exclusive conversation withshared their insights on the challenges facing the insurance sector in India, especially in critical segments like health and life insurance.

The experts also offered suggestions to bridge the awareness and adoption gap.

One of the key challenges highlighted by industry leaders is the low insurance penetration in health and life segments, despite the growing need.

Health insurance, in particular, continues to be seen as optional by many, unlike motor insurance which is mandatory. The lack of awareness, limited financial literacy, and cultural mindset that "I won't fall sick" contribute to low adoption.

Additionally, complex terms like "waiting period" or "co-pay" confuse first-time buyers, further discouraging them from purchasing policies.

Saurabh Vijayvergia, Founder & CEO of CoverSure, pointed out that insurance often fails to feel practical or personal to the customer.

He said, "People may own a policy, but often have little clarity on what it actually covers, how to claim, or whether it even meets their real needs. The challenge isn't just about affordability, it's about whether insurance is designed to genuinely serve and support the buyer. To drive real adoption, we need to reimagine insurance with the customer at its core."

According to Quickinsure, an online insurance comparison portal, while awareness has improved in urban areas, there's still a long way to go in Tier 2 and Tier 3 cities, and rural regions.

They highlighted that only about 37 per cent of Indians have any form of health cover.

Quickinsure said in a statement, "Most importantly, product simplification and transparent communication remain critical; we need to make insurance easier to understand and more relevant to people's everyday lives."

It also noted that affordability, lack of trust due to past claim issues, and complex product structures continue to act as barriers.

The role of the government in driving insurance awareness was also discussed.

While initiatives like IRDAI's Consumer Education Website and Ayushman Bharat are steps in the right direction, experts believe more targeted and localised efforts are required.

Vijayvergia of CoverSure suggested that awareness campaigns must be "hyper-local, involve families, and treat insurance literacy much like a public-health drive."

Quickinsure added that public-private partnerships, school programmes, and NGOs can play a major role in spreading awareness from the ground up.

Experts also stressed that the industry needs to address internal inefficiencies before seeking policy changes like GST waivers.

A significant concern is that over 30 per cent of health insurance premiums are taken up by distribution and administrative overheads, which do not add direct value for policyholders.

Private players also see an opportunity to close the awareness gap through simpler products and better engagement.

Quickinsure emphasised simplifying how insurance is explained, using regional languages, relatable examples, and visual formats. They also stressed the importance of post-sale support, particularly during the claims process, to build lasting trust.

Overall, industry leaders agree that insurance will only become widely adopted when it is easy to understand, accessible, and designed to fit into real lives. Awareness, affordability, and trust are at the heart of increasing penetration.

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