AN EMPIRICAL STUDY ON CONSUMER’S
PERCEPTION TOWARDS HEALTH INSURANCE IN AHMEDABAD CITY
Prof. Nirav R. Joshi
1, Prof. Suraj M. Shah
21,Assistant Professor,V.M. Patel Institute of Management (Faculty of Management), Ganpat University, Gujarat. & Research Scholar, RK University, Rajkot (India)
2Assistant Professor,V.M. Patel Institute of Management (Faculty of Management), Ganpat University, Gujarat.(India)
ABSTRACT
Health insurance is insurance against the health related risks which covers various medical expenses.
The evaluation of the in general peril of medical treatment expenses, among a targeted group, an insurer can build up a custom investment construction, such as a monthly payment, to make certain that capital is accessible to reimburse for the medical settlement particular in the cover insurance contract.
The Indian healthcare industry, which is made of hospitals, health check communications ,healthcare equipments, experimental trial, outsourcing, telemedicine and health insurance was projected at the worth US dollar 79 billion in the year 2012, and is anticipated to accomplish US $160 billion by 2017.
This paper attempts to know the perception among the customers towards Health Insurance of various service providers and to find out customers purpose and various factors for purchasing Health Insurance. A survey method with structured questionnaire using likert scale given to the sample of population. Single cross sectional and descriptive research design was used to find out customer’s perception towards Health Insurance. SPSS have been used to analyze and interpret the data. Exploratory factor analysis have been used for identified factors (EFA) using SPSS (Statistical package for the social science).
This paper makes a precious involvement known the fact that there was only unsatisfactory researches commerce with the customer’s perception towards Health insurance.
Keywords: Consumer’s perception, Healthcare Industry, Health Insurance.
I. INTRODUCTION
The term health insurance (popularly known as Medical Insurance or Mediclaim) is a type of insurance that
policy is a contract between an insurer and an insured person. The contract is renewable per annum. Health insurance policy is to make sure that insured person obtain the necessary cure. The health insurance is significant because the coverage helps people obtain well-timed medical care and acquire improved live and wellbeing. The knowledge of health insurance has been vast in the several years.
The health insurance market in India is exclusive and has considered a strong growth potential in the current years with the opening of a lot of overseas company into the marketplace. The health insurance market in India was worth INR 5,125 crores with a compounded yearly development time of 37 percent between 2002 and 2008. While the access of the health insurance market is reasonably little, it is one of the highest rising industries in India. Indian health insurance market is following other countries in terms of access. Indian health insurance is one of the most rapidly rising sectors in the Indian insurance sector. Also, Indian health insurance has gross premiums increased by 16 per cent from Rs 13,212 crore in 2011-12 to Rs 15,341 crore in 2012-13.
The health insurance premium has registered a compounded yearly expansion rate (CAGR) of 32 % for the past eight financial years.
1.1 Benefits of Health Insurance Policy
Benefit depends on the policy you choose and the coverage it provides. Here is a list of basic coverage provided by most of the health policies.
1. It helps securing a better future by paying a little as an expense today called the premium.
2. It reduces saving huge amount of financial losses, risk of financial breakdown in case of expensive medical and post-illness care.
3. It definitely induces a sense of security to the insured.
4. It provides financial security to the family members.
5. It covers your hospitalization and medical bills.
6. It also covers disability and custodial bills.
7. You can avail tax benefits on the premium paid under section 80D of the Income Tax Act.
8. The best factor, you can also opt for health insurance policies even after the age of 60.
The health insurance market covers very smaller part of the total population (about 10%) in India. At present scheme like Voluntary health insurance schemes or private-for-profit schemes; Employer-based schemes;
Insurance offered by NGOs / community based health insurance, and Mandatory health insurance schemes or government run schemes (ESIS, CGHS) are found in India.
According to the statistics of the World Health Organization (WHO), in 2011, India has spent only 3.9 per cent of gross domestic product (GDP) on the health sector which is the lowest amongst the BRICS (Brazil, Russia, India, China, South Africa) member countries pack. Moreover, amongst the BRICS nations, in 2011, Russia’s out-of-pocket expenses stood highest at 87.9 per cent closely followed by India (86 per cent), China (78.8 per cent), Brazil (57.8 per cent), and South Africa (13.8 per cent). On the other hand, these expenses in developed economies of US and UK were comfortably poised at 20.9 per cent and 53.1 per cent respectively.
II. LITERATURE REVIEW
Browne and Kim (1993) identified the factors that lead to the variations in life insurance demand across nations.
Important factors found in their study were dependency ratio, national income, social security provided by government, inflation, education level, average life expectancy, price of insurance and religion. The findings that life insurance is positively correlated with national income and negatively correlated with inflationary expectations, suggested that economic development and economic stability greatly increase life insurance consumption.
Saibaba et al (2002) studied that the perception and attitude of women towards life insurance policies. The study found that women feel that their lives were not as valuable as their husbands, they perceive insurance as a tool for risk coverage and not as a tax saving device, there was also lack of knowledge about suitable insurance plans.
Reddy (2005), in this article studied that the customer perception towards life insurance companies' policies.
This study was limited to Bangalore city only. The research concluded that majority of respondents feel that policies offered by private companies were up to their expectations but when compared with public companies' policies very few policies were better alternatives.
Rajesham and Rajender (2006) also discussed the changing scenario of the Indian insurance sector. They point out the challenges in the present situation as growing India's share in the global insurance market, having qualified, skilled actuaries, dispersion in rural markets, rising personalized policy for clients etc.
Frank and Enkawa (2009), in this article found that how economic processes influence customer satisfaction.
The study examined the separate impacts of economic growth and economic expectations on perceived value, quality expectations and customer satisfaction. The results had shown a strong correlation between economic expectations and (overall and industry-specific) quality expectations.
Selvakumar (2010) suggested that the insurance companies are targeting semi urban areas and rural areas with an aim to differentiate themselves from others. They also suggested that insurance companies are focusing on risk mitigation and protection.
Sbarbaro (2010) suggested that the lower income level group is the group that faces the maximum health related issues.
Bawa and Ruchita (2011) found that as far as there is lower level of awareness for health insurance. In addition to that people have less willingness to join for health insurance.
Nilay panchal (2013) concluded that respondents’ knowledge and confidence about health insurance was good.
Further research shown that awareness about the existence of health insurance was fine but liking is average.
Most respondents’ know about health insurance but some of them don’t have any policy because of low awareness or lack of information regarding health insurance. Research concluded that there were clear possibilities for health insurance market in India; there were also possibilities for the public and private health insurance companies, come of respondents plays a vital role for purchasing health insurance.
World health organization (2010) have considered health insurance an important source to achieve universal health care coverage.
III. OBJECTIVES OF RESEARCH Objectives of the research:
1. To find out factors that influence Health insurance policy holder.
2. To study the perception of Health insurance policy holder.
IV. RESEARCH METHODOLOGY 4.1 Research Design
The type of research was exploratory and conclusive descriptive research. Single cross sectional research design means one sample of respondent was drawn from the target population and information was obtained from this sample once. Survey method with a structured questionnaire was administered to 100 respondents in Ahmedabad region, using likert scale and designed to elicit specific information from the respondents.
4.2 Sample Design
Target populations were samples, a subgroups of a population selected for the study. Sample elements were health Insurance policy holder. In our research, Non probability with convenience sampling was used.
4.3 Data Analysis
In this study the methods of collecting and gathering data from a part of population will used by the questionnaire structured. The software approaches for data analysis in this research will SPSS.
V. RESEARCH ANALYSIS
Sr. No Demographic profile of Respondents Attributes Frequency Percentage
1 Gender Male 81 81.0
Female 19 19.0
Age Between 18-30yr 12 12.0
Between 31-45yr 47 47.0
Between 46-65yr 34 34.0
66 yr or older 7 7.0
3 Occupation Professionals 13 13.0
Businessman 25 25.0
Salaried employees 59 59.0
Students 3 3.0
4 Income Less than Rs.1,60,000 16 16.0
Rs.1,60,001 to 5,00,000 45 45.0
Rs. 5,00,001 to 10,00,000 39 39.0
5 Marital Status Married 82 82.0
Unmarried 18 18.0
6 Do you have Health Policy? Yes 100 100.0
7 Health Insurance coverage plan. Own/Individual coverage 76 76.0
plan
Family plan including spouse, children or any others.
24 24.0
8 Which Health Insurance policy you prefer most?
Public Sector 67 67.0
Private Sector 32 32.0
Others 1 1.0
9 Monthly premium in Health
Insurance.
Less than 500 47 47.0
500-2000 40 40.0
2001-5000 13 13.0
10 Term of Health insurance policy. Less than 2 Yr. 14 14.0
Between 2-5 Yr. 38 38.0
Between 5-7 Yr. 31 31.0
7-10Yr. 15 15.0
More than 10 Yr. 2 2.0
11 Do you consult Insurance agent while taking a Health insurance policy?
Every time 16 16.0
Often 9 9.0
Sometime 41 41.0
Never 34 34.0
12 How often are premium payments made on this plan?
Once a month 11 11.0
Once a every 3 months 8 8.0
Half yearly 43 43.0
Yearly 38 38.0
5.1 Which Route You Prefer While Taking A Health Insurance Policy?
Sr. No. Factors Mean value
1 Self decision. 4.13
2 Insurance agents. 3.10
3 Advertisement in TV, news paper or magazines. 2.28
4 Friend’s suggestion. 1.90
5 Others 2.15
Table: 1
Table: 1 shows that self decision and insurance agents having a mean values 4.13 and 3.10 respectively.
5.2 Objective of Health Insurance Policy
Sr. No. Factors Mean value
1 Risk coverage 4.04
2 To protect against high and unexpected Medical cost 4.00
3 Tax benefits 3.46
4 Medical emergencies. 3.15
5 All of the above. 3.98
Table: 2
Table: 2 shows that risk factors and to protect against high and unexpected Medical cost having a mean values 4.04 and 4.0 respectively.
5.3 Variables Mean Value Table
Sr. No. Variables Mean values
1. The health insurer is tie up with reputed hospitals. 3.95
2. The health insurer is provided cashless facilities. 3.68
3. Premium terms are easy. 3.55
4. Benefits payouts are quickly handle. 4.23
5. You save your taxation. 3.26
6. Health insurance portability offers to insured person. 3.19
7. Health insurance policy is affordable to you. 3.18
8. Health insurance is providing sense of security. 3.69
9. Health insurance is providing a financial security to the family members. 3.91
10. It covers your hospitazation and medical bills easily. 4.57
11. Ease of premium fills. 2.95
12. You will get extra risk coverage. 3.25
13. Ease of claim settlement process. 3.80
14. Inquiries related to insurance are answered promptly. 3.59
15. Your policy covers ambulance facility and boarding charges. 4.30
16. You get high quality and safe medical care. 3.85
17. You get the most effective drugs in the treatment. 3.36
18. You receive the best medical technology. 3.60
Table: 3
Table: 3 shows that it covers your hospitalization and your policy covers ambulance facility and boarding charges and the health insurer is tie up with reputed hospitals having a mean values 4.57, 4.30 and 3.95 respectively.
VI. FACTOR ANALYSIS
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .609 Bartlett's Test of
Sphericity
Approx. Chi-Square 144.002
df 45
Sig. .000
Table: 4
Table: 4 shows that KMO value is more than 0.60 so, data are reliable.
Rotated Component Matrixa
Component
1, Facility and affordability
2, Financial Security
3, Health Insurance Services
4, Health security The health insurer is
provided cashless facilities.
.648
Premium terms are easy. .771
You save your taxation. .621 Health insurance
portability offers to insured person.
.690
Health insurance policy is affordable to you.
.655
Health insurance is providing sense of security.
.854
Health insurance is providing a financial security to the family members.
-.736
Ease of claim settlement process.
.792
You get high quality and safe medical care.
.671
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
a. Rotation converged in 10 iterations.
Table: 5
Table: 5 show that four factors are identified like facility and affordability, financial security, Health Insurance services and health security respectively.
6.1 Reliability Test
SR.NO. FACTOR CRONBACH’S ALPHA VALUE
1 Facility and affordability 0.610
Table: 6
Table: 6 show that for factor like facility and affordability cronbach’s alpha value is 0.61 which is more 0.6. So, data are reliable.
6.2 Hypothesis for Testing: (Chi Square)
H1: There is an association between gender of Health Insurance policy holder and Health insurance coverage plan.
H2: There is an association between gender of Health Insurance policy holder and Term of policy.
H3: There is an association between occupation of Health Insurance policy holder and Health insurance coverage plan.
H4: There is an association between occupation of Health Insurance policy holder and Term of policy.
H5: There is an association between income of Health Insurance policy holder and Health insurance coverage plan.
H6: There is an association between income of Health Insurance policy holder and Term of policy.
6.3 Result Analysis
For the first hypothesisH1, the significance values P, at 95% confidence level is 0.040. So, we do not accept null hypothesis. And for remaining hypothesis Viz, H2, H3, H4, H5 and H6, the significance values P, at 95%
confidence level is 0.05. So, we don’t accept alternate hypothesis.
Only for first hypothesis, H1, there is an association between gender of Health Insurance policy holder and Health insurance coverage plan.
VII. OUTCOMES OF RESEARCH
1. Research shows that 81% of the respondents are male & remaining 19% of them are female respectively.
2. Research shows that 59% of the respondents are salarised persons, 25% of them are businessman, 13% of them are professional and remaining 8% are students respectively.
3. Research shows that 47% of the respondents are age group between 31-45 yr, 34% of them are between ages of 46-65yr, and 12% of them are age of between 18-30 yr and remaining 7% of the respondents are more than 65 year respectively.
4. Research shows that 45% of the respondents are having income level between Rs.1,60,001 too 5,00,000, 39% of them are having income level between Rs.5,00,001 too 10,00,000, and 16% of them having income level less than Rs.1,60,000 respectively.
5. Research shows that 82% of the respondents are married & remaining 18% of them are unmarried respectively.
6. All the respondents having Health insurance policy.
7. Research shows that 76% of the respondents having own/individual coverage plan and remaining 24% of the respondents having family plan including spouse, children or any other respectively.
8. Research shows that 67% of the respondents prefer public sectors & remaining 32% of them prefer private sectors respectively.
9. Research shows that 47% of the respondent’s monthly premium is less than Rs.500, 40% of them monthly premium is between Rs.500-2000, 13% of them monthly premium is between Rs.2001-5000 respectively.
10. Research shows that 38% of the respondents having term plan of Health insurance policy is between 2-5 yr., 31% of the respondents having term plan of Health insurance policy is between 7-5 yr., and 15% of the respondents having term plan of Health insurance policy is between 7-10 yr., 14% of the respondents having term plan of Health insurance policy is less than 2 yr. more than 10 yr. and remaining 2% of the respondents having term plan of Health insurance policy is more than 10 yr respectively.
11. Research shows that 81% of the respondents are made their premium half yearly and annually.
12. Self decision and insurance agents are mostly preferred by insurer having mean values of 4.13. & 3.10 respectively.
13. Risk coverage, to protect against high and unexpected medical cost and tax benefits are main objectives of Health insurance policy.
VIII. MANAGERIAL IMPLICATIONS AND CONCLUSION
On the basis of our research, we would like to give some managerial implication to the Health Insurance companies. Health Insurance companies should give more focus on some demographic criteria like age and gender. Health insurance companies should give more focus on age between 18-30 years and also emphasizes more towards female also. Also, health insurance companies can more concentrate on various important factors like risk coverage, to protect against high unexpected medical cost and tax benefits.
Many of the respondents can prefer health insurance policies through insurance agent, so health insurance
perceptions of the Health insurance policy holders, health insurance companies should give more focus on this important variables like its covers your hospitalization and medical bill easily, covers ambulance facilities &
boarding changes and benefits payout quickly handle having a mean values more than 4.0.
Some variables like give ease of premium and extra risk coverage and inquiries related to health insurance having a very low mean values.
IX. LIMITATION OF THE STUDY
The study was limited to specific city, sample size was limited, time and cost factors and past data were not available.
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