Factors Influencing the Purchase of Individual Health Insurance Policy in Urban India with Special Reference to Visakhapatnam City

Abstract

Post insurance reforms of India witnessed new insurance products in the health sector which were not available before the reforms. The share of health care expenditure to GDP is very low in India compared to other developing nations. Due to the exponential increase in the health care segment, the demand for health insurance product increased. As the demand for health care services is increasing in India it becomes important to study the factors which induce the demand for health insurance. Due to the absence of proper health care system in India, private health care system emerges very strongly and cost per head in health care is increasing very fast. It has become very difficult for lower-middle and middle-class people to afford the cost of health care. This has improved the awareness level of having health insurance to protect them from any unforeseen health cost in near future. I assume and propose that rising cost of health insurance would help people to understand the importance of unforeseen risk in case of health cost and induce to purchase health insurance products. As the cost of health seems to be rising so far In India people are becoming more conscious of health insurance purchase. The change in lifestyle encourages people to take treatment at high-end hospitals. This factor and the rising inflation are making individuals purchase health insurance. The outcome of this study would help the insurers and financial policy makers formulate proper strategies to increase the penetration of health insurance.