Innovative Insurance Solutions Are Crucial for Financial Security Amid Rising Disabilities in India

A large number of Indians face financial difficulties due to disabilities, with many experiencing temporary or permanent constraints each year. Recognizing this crucial issue, insurance companies are introducing innovative solutions. Comprehensive insurance coverage is essential to mitigate financial and social decline caused by disabilities, significantly affecting household expenditures and pushing many families below the poverty line.

A staggering number of Indians face financial hardship due to disability, with lakhs suffering temporary or permanent limitations each year. Recognizing this critical gap in financial security, insurance companies are stepping forward with innovative solutions, officials said on Sunday.

A 2018 report by the Ministry of Road Transport and Highways revealed that India, despite having only 1 per cent of the world's vehicles, accounts for 6 per cent of all road crashes.

According to experts, close to 5 to 7 lakh people in the country suffer from temporary or permanent disability each year due to high rates of accidents and crippling diseases, losing their ability to work and earn a livelihood.

''The onset of disability often brings substantial healthcare expenses, making comprehensive insurance coverage crucial to prevent social and financial decline,'' Future Generali India Insurance's Chief Distribution Officer, Ramit Goyal, said.

A study titled 'Measuring the financial impact of disabilities in India' available on the NIH website suggests around one-fifth (20.32 per cent) of households' monthly consumption expenditure is spent on out-of-pocket expenses for disability.

More than half (57.1 per cent) of households were pushed to catastrophic health expenditure due to disability. Almost one-fifth (19.1 per cent) of households that were above the poverty line before disability were pushed below it.

According to R Garg, Head-Term Insurance at Policybazaar.com, in India, where social security coverage is lacking, having disability income protection becomes prudent.

FGII's recently launched group health insurance product covers both temporary and permanent disabilities arising from physical or mental illnesses, accidents, and unforeseen events that result in income loss. It provides a safety net by replacing up to 75 per cent of pre-disability income per month, along with potential coverage for loan EMIs and credit card minimum payments.

Bajaj Allianz has seen a steady increase in personal accident insurance uptake, including disability income protection. Bhaskar Nerurkar, Head of the Health Administration Team at Bajaj Allianz General Insurance, noted that rising living costs and greater awareness of financial security through insurance are driving this trend. He added that as accident rates climb, more individuals and companies are seeking disability and income loss coverage, leading to higher penetration rates.

Continued support and favourable regulations from IRDAI can further boost this growth, Nerurkar emphasized.

P Nanda Gopal, Founder and CEO of Upsure, emphasizes the critical need for DIP plans among vulnerable groups like daily wage earners and gig workers.

''These individuals face a devastating financial situation when disability strikes,'' said Gopal.

(With inputs from agencies.)