Report Finds Critical Illness Protection Gap Widening in India
NEW DELHI — A growing gap between the cost of treating serious illnesses and available financial protection is widening in India, even as employers expand health coverage and preventive care benefits, according to a new report.
The study by professional services firm Aon said employers are increasingly investing in preventive healthcare, outpatient benefits, and digital wellness solutions as part of a broader shift toward proactive health management.
“Employers are increasingly recalibrating plan structures, introducing cost-sharing mechanisms such as voluntary top-ups, co-pay models, and employee-funded riders,” the report said.
Despite these efforts, the report highlighted that India’s financial protection gap for critical illnesses remains high compared to global peers, pointing to significant growth potential for the insurance sector.
Employer-provided health insurance in India is typically focused on inpatient care, with average coverage ranging from Rs 3 lakh to Rs 5 lakh. Critical illness riders, where offered, are generally limited to Rs 5 lakh to Rs 10 lakh, which may be insufficient for prolonged or complex treatments.
The report noted that the protection gap — defined as the difference between the actual financial impact of a serious illness and the coverage available through insurance, employer benefits, and personal savings — continues to widen.
Globally, similar trends are being observed, particularly in high-growth regions such as Asia-Pacific, the Middle East and Africa, and Latin America, where rising medical costs are outpacing wage growth and benefits expansion.
In India, healthcare inflation is estimated at around 11.5 percent, adding further pressure on employer-sponsored plans and limiting their ability to provide adequate coverage.
The report called for a more integrated approach combining insurance design, employer-sponsored benefits, and individual financial planning to better address the growing protection gap. (Source: IANS)
