One of the important gains of liberalization of insurance in India has been the much-needed thrust to health insurance. Although health is one of the most critical areas for developing countries, less than 1% of the population in India has some sort of health insurance or the other. The article deals with the issues and challenges faced by the health insurance industry in the country.

In the earlier years, people had two fears: living too long and dying too early. Taking a life insurance policy providing for risk cover at a very cheap premium covered the fear of dying early. The risk of living too long was taken care by a pension policy with a provision of receiving annuity payments till death. But now a third situation has come—you are living long, no doubt, but are you living healthily or you are sick incurring not only huge cost but also inconveniencing the near and the dear. This is termed as `Living Death'. How a person is going to meet this eventuality is the subject matter of this article. The savior is health insurance.

Medical advancements have taken care to see that a person's life is prolonged but at what cost? The cost of treatment is going up year after year with the hospitals becoming five star hotels—they care not only for the patient but also the person accompanying the patient—may be more for the latter. With the public sector and the corporates providing group health cover for their employees through the insurance companies, the hospitals too look for the detail as to whether the patient is covered by a Mediclaim policy or not, first before registration as their tariffs differ accordingly—mostly upwards if there is a medi-cover. With all these, only 1% of the organized workforce is covered under Mediclaim and other schemes like CGHS, ESI, etc. Around 75% of people in India spend their own money for healthcare. The less mentioned about the other common public including the unorganized labor, the better.

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