Health insurance in India is still for the privileged few. However, the increasing healthcare cost and an ageing

population would trigger the growth of health insurance as it’s the most cost-effective method of risk financing.

The consumer psyche is also slowly changing to cover their financial risk due to illnesses or accidents. The

prudent consumer can now pass on a huge unknown cost (cost of illness) for a small known cost (premium to

be paid) to the insurer. Buying health insurance thus becomes a logical thing to do.

Health insurance in India is, however, still largely in the form of a plain vanilla cover, mediclaim, introduced a

decade-and-half ago. Though this product has become a generic name for health insurance, it has little option

for customisation for an individual. Customisation is used in group health insurance by corporates for their

employees.

In group health insurance, customisation is possible in terms of addition of certain covers like maternity benefits,

waiver of waiting periods, cost-control measures like incorporating room limits, co-payment, deductibles and so

on. In fact, group health insurance in India assumes a nature of all-risk cover.

In case of the individual, customisation has not taken off despite the fact that we now have different products

such as hospital cash, critical illnesses and so on, besides the standard generic hospitalisation cover, in the

market. As a first step, we have customised the individual hospitalisation product by segmenting the age group.

Today, customisation is in terms of introduction of different plans with different options.

Though deductibles, co-payments, which actually have a bearing on the premia, are still not very popular. This

can be attributed to poor or little awareness among individual customers. For any product to be customised, the

awareness level has to be high enough.