Most Indians are just ‘one hospitalization away from bankruptcy,’ Zerodha’s Nithin Kamath warns

Kamath wrote in a post on X that Indians should carefully choose insurers with a track record of at least five to ten years and a desirable claim settlement ratio in the range of 80-90% to avoid a financial difficulties in times of a health crisis.

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“Most Indians are just 1 hospitalisation away from bankruptcy,” he wrote. “A good health insurance plan is mandatory.”

Kamath himself suffered a stroke in February this year, and cited anything from poor sleep, overwork, and exhaustion to the passing away of his father as the possible reasons.

Kamath also recommended selecting an insurer with a network of anywhere between 5,000-8,000 hospitals and an incurred claim ratio of 55-75%.

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Why is it important to consider getting medical insurance?

India has one of the highest medical inflation rates in Asia, reaching 14%, meaning medical costs have growth this much, according to a report by insurtech company Plum, titled “Health Report of Corporate India 2023,” which also found out that a staggering 71% of workers cover their healthcare costs out of their pocket and only 15% got health insurance support from employers.

There are also other issues such as getting insurance claims approved. 43% participants in a survey by Local Circles, involving 39,000 participants across 302 districts, struggled to get their claims approved due to a lack of full disclosure of policy exclusions, ambiguity caused by technical jargon, and claims rejected due to pre-existing conditions.

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