70% choose health as a reason for buying health insurance over tax savings; Research

A recent study of health insurance trends show that 70% of people buy health insurance not for tax purposes and ‘Cashless Claim’ is the top reason to buy health insurance, followed by the protection of savings and managing inflating medical costs.

ICICI Lombard’s report on emerging trends in health insurance with focus on taxation benefit”, offered a comprehensive analysis of the financial behaviour of individuals who have made at least one tax-saving financial investment and own health insurance or have an intention to purchase.

Tax benefits are not the primary driver for most consumers study found as only 30% of consumers cited ‘Tax exemptions/tax rebates’ as one of the top reasons for purchasing health insurance.

ICICI Lombard report said that more than 6 in 10 respondents (61%) rely on friends, family, and their bank relationship manager as key sources of information for understanding how to make tax savings while the younger age group -21-35 years-shows a greater reliance on self-awareness through knowledge in the public domain.

While the understanding of health insurance as a tool for protection is on the rise, only 54% of consumers are fully aware of how they can save tax by investing in health insurance, highlighting the need for increased awareness initiatives.

Also, the future of health insurance is looking promising, with close to 98% of existing health insurance owners expressing their likelihood to renew next year, and 72% intending to 1st time purchase or buy more health insurance in the next year.’

A remarkable 84% of financially savvy customers have invested in health insurance, showcasing the growing recognition of the importance of health coverage.The preference for health insurance as a tax-saving option is on the rise in non-metro areas, emphasizing its increasing appeal beyond major cities.

The report showed that age and life stage play a critical role in financial decisions, with individuals aged 26-45 making a greater set of investments.

Individuals aged 26-35 showed highest intention to invest in health and life insurance, fixed deposits, and mutual funds in the next year.