Is it a ‘UPI moment’ for health insurance sector, and how will it benefit customers?


Health insurance in India has come a long way, transforming from a relatively nascent sector to a critical component of the country’s healthcare landscape. Over the years, this evolution has played a pivotal role in securing the lives and well-being of millions of Indians. The development of health insurance in India has been akin to the Unified Payments Interface (UPI) moment for financial transactions, reshaping how healthcare services are accessed, financed, and delivered.Let us explore the evolution of health insurance in India, its impact on securing people’s lives, and why it represents a UPI moment for healthcare in the country.

Early Stages: Limited Access and Awareness

Health insurance in India had a humble beginning with limited access and awareness. In the early stages, health insurance was primarily available to a select few who could afford it. Many Indians relied on out-of-pocket payments for medical expenses, often leading to financial hardships, especially during medical emergencies. The concept of health insurance had not yet gained widespread acceptance, and insurance penetration was low.


Affordability: Health insurance premiums were often considered too expensive for the average Indian. This restricted access to coverage, particularly among lower-income groups.

Lack of Awareness: Many Indians were unaware of the benefits of health insurance and the financial risks associated with not having coverage. 

Limited Coverage: Insurance plans at the time offered limited coverage, with exclusions for pre-existing conditions and certain treatments.

Key Developments

Entry of Private Players: The entry of private insurance companies led to increased competition and innovation in health insurance products. New policies and plans were introduced to cater to diverse healthcare needs.

Health Insurance Portability: The concept of health insurance portability emerged, allowing policyholders to switch insurers without losing accrued benefits. This provided policyholders with more flexibility and choice. 

Wider Coverage: Insurance providers started offering more comprehensive coverage, including coverage for pre-existing conditions, maternity benefits, and day-care procedures.

Online Platforms: The advent of the internet and digital technology facilitated the purchase and management of health insurance policies through online platforms. This made it more convenient for individuals to access insurance.

The UPI Moment for Health Insurance

The introduction of UPI (Unified Payments Interface) revolutionized digital payments in India, making them more accessible, convenient, and secure. Similarly, the evolution of health insurance in the country can be likened to a UPI moment for healthcare. Here’s why:

Increased Accessibility

Just as UPI made financial transactions accessible to the masses, health insurance in India has become more accessible. The expansion of insurance providers, including public and private players, has widened the reach of health insurance across urban and rural areas.

Government initiatives, such as Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY), have extended health insurance coverage to economically vulnerable families, providing access to quality healthcare services.

Digital Transformation 

Like UPI facilitated digital payments, health insurance has embraced digital technology. Policyholders can now purchase, renew, and manage insurance policies through user-friendly mobile apps and websites.

Telemedicine and virtual healthcare consultations have gained traction, allowing individuals to access medical advice and services remotely, a trend accelerated by the COVID-19 pandemic.

Choice and Customization

UPI empowered users to choose their preferred payment methods and platforms. Similarly, health insurance in India offers policyholders a wide range of choices and customization options.

Individuals can select policies tailored to their specific healthcare needs, whether it’s coverage for critical illnesses, maternity benefits, or specific treatments.

Financial Security

Just as UPI enhances financial security by enabling cashless transactions, health insurance provides financial security by covering medical expenses. It safeguards policyholders from the financial burden of healthcare costs, reducing the need for out-of-pocket payments.

Regulatory Oversight

UPI transactions are regulated to ensure security and reliability. Similarly, the IRDAI regulates health insurance to protect policyholders’ interests, enforce guidelines, and maintain transparency in the insurance sector.

Preventive Care

UPI promoted digital financial management, and health insurance encourages preventive healthcare. Many policies now include coverage for preventive services like health check-ups and vaccinations, promoting overall well-being.

Innovation and Competition

UPI ushered in innovation and competition among payment service providers. Health insurance in India has seen a surge in innovative products and services, driven by competition among insurance companies.

Insurers are constantly developing new policies, add-ons, and wellness programs to cater to evolving healthcare needs.

Health Insurance at Current Times

Updating health insurance plans to align with current situations and evolving healthcare needs is crucial to ensure that policyholders receive optimal coverage and protection. The secret to choose the best health insurance plans for family and individual lies in opting for the coverage that is relevant in current scenario. Several reasons highlight the importance of regularly updating health insurance plans:

Changing Healthcare Landscape

The healthcare landscape is dynamic, with advancements in medical technology, changes in treatment protocols, and the introduction of new healthcare services. Insurance plans need to adapt to these developments to provide policyholders access to the latest and most effective treatments. Regular updates ensure that policyholders can avail themselves of state-of-the-art medical care when needed.

Rising Healthcare Costs

Healthcare costs have been consistently increasing, driven by factors such as inflation, technological advancements, and the growing burden of chronic diseases. To keep pace with these rising costs, insurance plans must be updated to offer adequate coverage limits. Without updates, policyholders may find their insurance coverage insufficient to meet the expenses associated with modern healthcare services.

Emerging Health Threats

Emerging health threats, such as pandemics and new diseases, underscore the need for updated health insurance plans. The COVID-19 pandemic, for example, highlighted the importance of having coverage for infectious diseases and related treatments. An updated plan should consider coverage for unforeseen health crises and emerging health risks.

Lifestyle Changes

Changes in lifestyle, including dietary habits, exercise routines, and work environments, impact health risks and healthcare needs. For instance, the prevalence of lifestyle-related diseases like diabetes and obesity has increased. Updated plans should account for these shifts and offer preventive care and coverage for related conditions.

Demographic Changes

Changes in the age distribution and demographics of a population can affect healthcare needs. With an aging population, health insurance plans need to address the unique healthcare requirements of senior citizens, including coverage for age-related conditions and long-term care.

Regulatory Updates

Healthcare regulations and policies are subject to change, impacting insurance requirements. Insurance providers must stay compliant with evolving regulations, which may necessitate updates to policy terms, coverage options, or pricing structures. 

Advancements in Medical Research

Ongoing medical research leads to new treatments, medications, and therapies. Updated health insurance plans should consider coverage for these medical breakthroughs, ensuring that policyholders can access cutting-edge treatments when necessary.

Digital Transformation

The digital transformation of healthcare has brought about telemedicine, remote monitoring, and electronic health records. Health insurance plans should adapt to these changes by offering coverage for virtual healthcare services and related technologies.

Customer Feedback

Feedback from policyholders provides valuable insights into their evolving needs and expectations. Insurance providers should listen to customer feedback and use it to refine and update their offerings to better meet policyholders’ requirements.

Competitive Landscape

The insurance industry is highly competitive, with providers constantly innovating to attract and retain customers. To stay competitive, insurance companies update their plans by introducing new features, riders, and add-ons that address changing customer preferences and industry trends.

Updating health insurance plans with current situations is essential to keep policyholders well-protected and aligned with the evolving healthcare landscape. Regular updates ensure that coverage remains relevant, comprehensive, and adaptable to emerging health risks, lifestyle changes, and advancements in medical care. Policyholders should also periodically review and assess their insurance plans to make informed decisions about potential updates and enhancements based on their specific healthcare needs and life circumstances.


The evolution of health insurance in India, mirroring the UPI moment in financial transactions, has transformed how healthcare services are accessed and financed. It has expanded accessibility, fostered digital transformation, offered choice and customization, ensured financial security, and promoted preventive care. With regulatory oversight and innovation driving the industry, health insurance in India continues to evolve, securing the lives and well-being of millions of Indians.

As healthcare becomes increasingly complex and costly, health insurance serves as a vital tool for individuals and families to navigate the challenges of medical expenses. Just as UPI has become an integral part of daily financial transactions, health insurance has become an indispensable component of healthcare planning in India, providing individuals with the peace of mind and financial protection they need in an ever-changing healthcare landscape.