Penetration of health insurance is woefully low in India. We have a strange phenomenon in India where health insurance penetration in relative terms is higher in BPL segment (due to government-sponsored schemes), middle class government employees and in the affluent segment (due to higher awareness and ability to afford) as compared to the middle-lower middle income segments, especially in the self-employed professional category in large metros as well as small town India. While this segment may not be paying income tax, a large number of such self-employed professionals are today covered in the ambit of Goods and Services Tax (GST). Thus, while deductions in income tax may not be attractive to this segment, a set-off of GST payable could make a difference to them in terms of their cash flows and should be considered to encourage purchase of health insurance for themselves, their families as well as for their employees – who probably are the most vulnerable and need it the most.
For a large number of Indians, the biggest investment is in buying or building a home. With easier availability of mortgages and government thrust on affordable homes, Indians are not just investing their savings but also their future savings in buying or building homes. At the same time, exposure to natural calamities is only increasing with earthquakes, landslides, and floods. The frequency of building collapses also seems to have increased if one goes by news reports. A natural calamity in a large urban agglomeration could lead to severe losses to a very large number of home owners as less than 1 per cent of homes in India are insured today. These losses could cause a large social upheaval and stress on government resources as well as on non-performing assets (NPAs) for mortgage lenders. There is, therefore, a crying need to increase the penetration of home insurance in India. Besides the lack of awareness, there seems to be a cultural opposition to insure homes as we believe that “it will never happen to us”. This thinking needs to be changed and home owners need to be forced to get home insurance till it becomes an automatic part of buying/building homes in India. I would, therefore, recommend that buying home insurance be made a pre-requisite to registration of homes just like buying third party motor insurance is mandatory for registration of automobiles in India. This can start with new homes and then extended to others at the time of registration of lease agreements, changes in plans, extensions etc. Buying home insurance is a good habit and this has to be fostered forcibly to save our society from future catastrophic losses.
(Roopam Asthana, is the CEO & Whole Time Director of Liberty Videocon General Insurance Co. Ltd)
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