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General insurers find tough to market insurance plans in rural areas

The penetration of health insurance in urban areas is more due to high level of awareness and advance medical infrastructure

May 24, 2012 12:17 IST | India Infoline News Service
According to media reports, general insurance companies are finding it difficult to sell their products in rural and semi-urban markets. The reports said that marketing health insurance plans for rural people has been a challenge because of poor awareness of insurance products. Health insurance in India covers less than 5% of the population.  
The penetration of health insurance in urban areas is more due to high level of awareness and advance medical infrastructure. However, in smaller cities, much of the medical expenses are still funded by individuals and households; the rural customer still has to borrow money or sell their assets to meet healthcare expenses.
Government-run schemes such as Rashtriya Swasthya Bima Yojana—for workers in the unorganised sector—have been effective in increasing penetration of insurance in rural areas.
To expand its reach in rural areas, many insurers are tying up with regional rural banks. These tie-ups also help them meet the IRDA (Insurance Regulatory and Development Authority) mandate of maintaining a certain quota of business from rural markets.
Also, many hospitals and clinics are being set up in smaller cities which would help in creating awareness about healthcare among people. Also, some health insurers have introduced plans specifically designed for rural people.

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