Most health cover owners unaware of terms: Survey

Mumbai: A survey of health insurance policyholders has revealed a surprising lack of knowledge about the coverage among the insured. The low level of insurance literacy relates to the most basic aspects of health insurance.

Of those surveyed, 20% were unaware of the terms of the cover, another 40% did not know Irdai was the regulator and 90% inaccurately believe that only bills paid at the hospital are covered. The survey was conducted by ICICI Lombard and included both those who already own health insurance and those proposing to buy health insurance.

Even among owners of health insurance policies the overall understanding of abbreviations used by the industry was low. Among existing policy owners 42% were unaware what TPA (third-party administrator), NCB (no claim bonus) or OPD (outdoor patient department) stood for.

"Insurance policies tend to have a lot of complex jargon, which is difficult to understand by a layperson. This is where insurance literacy comes into play. The only way to accelerate financial inclusion and thereby insurance penetration in the country is by improving financial literacy," said ICICI Lombard General Insurance ED Sanjeev Mantri.

The low-level of awareness was despite 46% of the health insurance owners claiming that they purchased their policies completely own their own while 51% of intending buyers claim they are very confident about choosing a plan completely by themselves.

Even in motor insurance, the level of awareness is not very high. Less than 25% of motor insurance policy owners fully understood terms such as IDV (insured's declared value), Zero dep (zero deduction for depreciation) and roadside assistance cover.