Behavioural Dynamics of Health Insurance Adoption: A Consumer Perspective

Indian Journal of Management and Language (IJML) ISSN: 2582-886X (Online), Volume-5 Issue-2, October, 2025 29 Retrieval Number: 100.1/ijml.B209905021025 DOI: 10.54105/ijml.B2099.05021025 Journal Website: www.ijml.latticescipub.com Published By: Lattice Science Publication (LSP) © Copyright: All rights reserved. Behavioural Dynamics of Health Insurance Adoption: A Consumer Perspective N. Ramanjaneyulu, G Hari Kumar, M Umrez Abstract: Health insurance plays a critical role in mitigating the financial risks associated with medical expenses. This study investigates consumer behaviour toward health insurance, focusing on demographic influences, key decision-making factors, and relevant theoretical frameworks. In the aftermath of the pandemic, consumer attitudes toward health insurance have undergone a significant transformation. Once viewed as a discretionary expense, health insurance is now regarded as a crucial component of financial planning. As a result, the demand for health insurance has increased year by year. This paper examines the key factors influencing consumer behaviour, including heightened health awareness, financial preparedness, policy flexibility, digital accessibility, and trust in providers. By understanding these shifts, insurers and policymakers can better align their offerings with consumer needs and expectations in a post-pandemic landscape. Ultimately, this study aims to provide insights into the motivations behind health insurance adoption and the evolving priorities of modern consumers. Keywords: Health Insurance, Post-Pandemic, DecisionMaking, Risk Perception, Policy Flexibility, Digital Accessibility. I. INTRODUCTION Insurance helps protect against future uncertainties such as health issues, death, or property loss. In India, while life insurance remains dominant, health insurance is expanding due to increasing awareness, population growth, and supportive government initiatives. Economic development and privatization have further driven this growth, as individuals seek both coverage and financial benefits [1]. Based on this increase, health insurance in India primarily covers inpatient hospitalization, while outpatient services are often excluded. Since the liberalization of the insurance sector in 2000, private insurers have introduced a range of innovative products to meet changing consumer demands. Rising healthcare costs, urbanization, and increasing health awareness continue to drive this expansion. Despite these factors, overall insurance penetration remains low, Manuscript received on 02 September 2025 | Revised Manuscript received on 06 October 2025 | Manuscript Accepted on 15 October 2025 | Manuscript published on 30 October 2025. *Correspondence Author(s) Dr. N. Ramanjaneyulu*, Professor, Department of Master of Business Administration, MLR Institute of Technology, Hyderabad (Telangana), India. Email ID: ramanjimba[email protected], ORCID ID: 0000-0002-09229894 Dr. G Hari Kumar, Assistant Professor, Department of Commerce and Business Administration, Sri Sai Baba National Degree College, Anantapur (Andhra Pradesh) India. Email ID: [email protected] M Umrez, Assistant Professor, Department of Commerce and Business Administration, MLR Institute of Technology, Hyderabad (Telangana), India. Email ID: [email protected], ORCID ID: 0000-0002-2717-5404 © The Authors. Published by Lattice Science Publication (LSP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/) highlighting the need for further innovation and outreach to make health insurance a widely adopted financial safeguard [2]. One of the critical reasons for promoting health insurance is the high burden of out-of-pocket healthcare expenses in India. Over 80% of health spending is privately funded, primarily through direct payments to private providers. While wealthier individuals may afford this, the poor often avoid necessary treatment or fall into debt trying to pay for it. This financial strain underscores the urgent need to position health insurance as a protective tool for all income groups [3]. In this context, understanding the role of socioeconomic factors becomes essential. Variables such as age, gender, income, marital status, and existing insurance coverage significantly influence how individuals choose their health insurance providers. These factors shape consumer preferences, highlighting the need for insurers to tailor products and communication strategies accordingly [4]. Despite the importance of insurance, coverage remains limited. Many individuals primarily purchase life and health insurance to protect their families and reduce financial stress. Yet, the overall spending on such policies is still low, indicating gaps in awareness, affordability, or perceived value [5]. To address these gaps, it's important to study consumer behaviour more deeply. Purchasing decisions are influenced not only by need but also by perception. Factors like what consumers buy, why, when, how much they spend, and who makes the decision all play a role in shaping demand for insurance products [6]. Finally, limited awareness around benefits like tax savings, risk protection, and return on investment remains a barrier. If insurers invest more in targeted advertising and improve service delivery—such as speeding up claim processing—customer understanding and satisfaction can significantly improve, leading to greater trust and adoption of health insurance in the long run [7]. II. REVIEW OF LITERATURE Puja Roshani et.al (2022). This study examines the behavioural dynamics of health insurance adoption among 386 households in Andhra Pradesh, using a cross-sectional design and area sampling. Most respondents were male (65.5%), married (87%), aged 30–60, and predominantly Hindu. They were generally well-educated and employed in the private sector. About 79% had a monthly income of ₹50,000 or more. The research identifies key factors, perceptions, and barriers influencing insurance decisions through statistical Behavioural Dynamics of Health Insurance Adoption: A Consumer Perspective 30 Retrieval Number: 100.1/ijml.B209905021025 DOI: 10.54105/ijml.B2099.05021025 Journal Website: www.ijml.latticescipub.com Published By: Lattice Science Publication (LSP) © Copyright: All rights reserved. analysis. Madan Mohan Dutta (2021) evaluated the performance of India’s health insurance sector using regression analysis. The study concluded that with the integration of advanced technology from foreign collaborators and the regulatory involvement of IRDA, the industry has strong potential to become profitable. Deepali Garge et al. (2020) studied the awareness of health insurance among 102 people in Maharashtra. They found that the topic was conveyed through sources such as employers, the internet, newspapers, TV, and friends. The study revealed low awareness levels, highlighted the need for education, and encouraged individuals to view health insurance as a general necessity, not just for emergencies. V.M. Dandekar (2019) explored the growth potential of the health insurance market in Bilaspur by surveying 200 agents. The study revealed that customers often faced challenges in selecting appropriate health insurance plans. It is recommended that the government encourage wider promotion of health insurance, and that agents play a more active role in educating potential customers and target groups about its advantages. Chette Srinivas Yadav et al. (2018), in their article “Impact of Socioeconomic Factors on Purchase Decision of Health Insurance,” examined how socioeconomic variables affect the choice of health insurance providers. The study found that age, gender, income, and marital status influenced decision-making, whereas factors such as sum assured, premium amount, occupation, insurance coverage, and type of insurance had no significant impact on the preference for public or private insurers. The study did not detail how the offerings of public and private insurers varied across urban and rural populations. Sini V, Karpagam CR (2016) [8]. In their investigation, they stated that customers have partial awareness of benefits such as tax savings, risk protection, and return on investment, which remain barriers to understanding these benefits. If insurance companies focus more on targeted advertising and improve service delivery, such as speeding up claim processing, customer understanding, and satisfaction can significantly increase, leading to greater trust and adoption of health insurance in the long run. A. Objectives of the Study i. To assess how demographic factors influence the purchasing behaviour of health insurance consumers. ii. To explore the theoretical frameworks that form the basis for understanding consumer behaviour toward health insurance products. iii. To identify key factors that affect customers' decisions when selecting a health insurance plan. iv. To analyze emerging trends in consumer behaviour related to the purchase of health insurance III. RESEARCH METHODOLOGY The study employed a descriptive research design, utilizing data collected from primary and secondary sources. A structured quantitative questionnaire was used to gather information directly from respondents. Considering the broad availability of data and the size of the health insurance population, a random sampling method was adopted to select 500 participants. The data collection instrument included statements aimed at evaluating the key study variables. The questionnaire covered the respondents' socioeconomic background as well as the factors influencing their decision to purchase individual health insurance. A. Statistical Tools The study used descriptive analysis, ANOVA, and Chisquare tests to examine demographic influences and relationships in health insurance consumer behaviour. B. Hypothesis H₁: There is no significant relationship between the age of respondents and their preference for the type of health insurance. H₂: There is no significant relationship between annual income and the amount of premium paid per annum. Theoretical Framework of Consumer Behaviour Toward Health Insurance Indian Journal of Management and Language (IJML) ISSN: 2582-886X (Online), Volume-5 Issue-2, October, 2025 31 Retrieval Number: 100.1/ijml.B209905021025 DOI: 10.54105/ijml.B2099.05021025 Journal Website: www.ijml.latticescipub.com Published By: Lattice Science Publication (LSP) © Copyright: All rights reserved. Table I: Demographic Details Particulars Respondents Percentage Particulars Respondents Percentage Gender Occupation Male 416 83.20% Unemployed 30 6.00% Female 84 16.80% Self-employed 64 12.80% Marital Status Professional 197 39.40% Married 383 76.67 Private employee 126 25.20% Single 117 23.33 Government 13 2.60% Age Others 70 14.00% 20-30 60 12.00% Premium Paid Per Annum 31-40 123 24.67% Below 12,000 63 12.60% 41-50 183 36.67% 12,001-15,000 173 34.60% 51-60 77 15.33% 15,001-30,000 210 42.00% above 60 57 11.33% Above 30,000 54 10.80% Annual Income Type of Health Insurance Below 5,00,000 110 22.00% Group 183 36.60% 5,00,001-7,50,000 120 24.00% Individual 53 10.60% 7,50,001-10,00,000 137 27.40% Family 221 44.20% Above 10,00,000 133 26.60% Combination 43 8.60% Total Sum Assured Source of Information Below 1,00,000 23 4.60% TV 68 13.60% 1,00,001-2,00,000 74 14.80% Newspaper 43 8.60% 2,00,001-5,00,000 230 46.00% Agents 183 36.60% Above 500000 173 34.60% Family/ Friends 37 7.40% Number of Health Insurance Policies Purchased Internet 56 11.20% Single 320 64.00% Employee of an insurance company 26 5.20% More than one 180 36.00% Tax consultants and doctors 54 10.80% Insured Companies Others 33 6.60% Public sector 185 37.00% Private sector 315 63.00% C. Analysis H₁: There is no significant relationship between the age of respondents and their preference for the type of health insurance. Table II: Observed Frequencies (O) Age Group Individual (O) Family (O) Group (O) Combination (O) Row Total 20–30 9 24 16 9 58 31–40 19 43 34 14 110 41–50 36 73 62 17 188 51–60 18 27 21 14 80 60+ 15 27 20 12 74 Total 97 194 153 66 500 Expected Frequencies (E) = (𝑹𝒐𝒘 𝑻𝒐𝒕𝒂𝒍)×(𝑪𝒐𝒍𝒖𝒎𝒏 𝑻𝒐𝒕𝒂𝒍) 𝐆𝐫𝐚𝐧𝐝 𝐓𝐨𝐭𝐚𝐥 Table III: Expected Frequencies (E) Age Group Individual (E) Family (E) Group (E) Combination (E) 20–30 11.252 22.512 17.748 7.656 31–40 21.34 42.68 33.66 14.52 41–50 36.47 72.83 57.53 24.82 51–60 15.52 31.04 24.48 10.56 60+ 14.36 28.66 22.53 9.77 Chi-Square test (χ2)= (𝒐𝒃𝒔𝒆𝒓𝒗𝒆𝒅 𝒗𝒂𝒍𝒖𝒆−𝒆𝒙𝒑𝒆𝒄𝒕𝒆𝒅 𝒗𝒂𝒍𝒖𝒆)𝟐 𝒆𝒙𝒑𝒆𝒄𝒕𝒆𝒅 𝒗𝒂𝒍𝒖𝒆 Table IV: Chi-Square Age Group Individual Family Group Combination 20–30 0.452 0.101 0.172 0.236 31–40 0.269 0.006 0.056 0.014 41–50 0.0002 0.006 0.633 4.622 51–60 0.214 1.006 0.120 1.761 60+ 0.041 0.405 0.144 0.527 χ2=0.452+0.101+0.172+0.236+0.269+0.006+0.056+0.014 +0.0002+0.006+0.633+4.622+0.214+1.006+0.120+1.761+0. 041+0.405+0.144+0.527. χ2= 10.544 Degrees of Freedom (df) = (Rows – 1) x (Column – 1) = (5 – 1) x (4 – 1) = 12 At df = 12 and α=0.05, the critical value from Chi-square tables is 21.026. Since χ2 = 10.544 < 21.026. We fail to reject the null hypothesis. There is no significant relationship between the age group and type of health insurance preference at the 5% significance level. H₂: There is no significant relationship between annual income and the amount of premium paid per annum. Table V: ANOVA: Two-Factor Without Replication Summary Count Sum Average Variance Below 5,00,000 4 110 27.5 174.3333 5,00,001-7,50,000 4 120 30 188.6667 7,50,001-10,00,000 4 137 34.25 704.9167 Above 10,00,000 4 133 33.25 130.25 Below 12,000 4 87 21.75 116.25 12,001-15,000 4 89 22.25 60.91667 15,001-30,000 4 141 35.25 146.25 Above 30,000 4 183 45.75 382.9167 Behavioural Dynamics of Health Insurance Adoption: A Consumer Perspective 32 Retrieval Number: 100.1/ijml.B209905021025 DOI: 10.54105/ijml.B2099.05021025 Journal Website: www.ijml.latticescipub.com Published By: Lattice Science Publication (LSP) © Copyright: All rights reserved. ANOVA Source of Variation SS df MS F P-value F crit Rows 114.5 3 38.16667 0.171364 0.913059 3.862548 Columns 1590 3 530 2.379646 0.137373 3.862548 Error 2004.5 9 222.7222 Total 3709 15 Based on the results of the two-factor ANOVA without replication, the p-value for the variation across income levels (rows) is 0.913, which is significantly greater than the standard significance level of 0.05. This indicates that the differences in annual income do not have a statistically significant effect on the amount of premium paid per annum. Similarly, the p-value for the premium groups (columns) is 0.137, which is also greater than 0.05, suggesting no significant difference in premium amounts across the different groups in relation to income. Since both p-values are above the 0.05 threshold, we fail to reject the null hypothesis (H₂). Therefore, we conclude that there is no significant relationship between annual income and the amount of premium paid per annum in this dataset. D. Emerging Trends in Health Insurance i. Digitalization & Insurtech Integration Insurers use AI, mobile apps, and online platforms to simplify buying, renewing, and claiming health insurance, offering faster, paperless, and more customer-friendly experiences. ii. Personalized & Flexible Insurance Plans Tailor-made policies now cater to seniors, critical illnesses, and specific needs, with modular add-ons, global coverage, and reduced waiting periods for pre-existing conditions. iii. Preventive Healthcare & Wellness Benefits Health plans increasingly include annual checkups, fitness rewards, mental health support, and discounts for maintaining a healthy lifestyle through wearable device tracking and wellness programs. iv. Micro Insurance & Rural Inclusion Affordable micro insurance plans and embedded policies bundled with digital services are expanding insurance access to underserved rural areas and low-income urban populations. v. Innovative Product Offerings New-age plans offer unlimited sum-insured options, eliminating top-ups and limits, while combining hospitalization, diagnostics, and cashless treatment in a single comprehensive solution. E. Findings i. Health insurance awareness is generally low, with key information sources being employers, media, and social networks. ii. Health insurance is increasingly seen as a necessary financial tool rather than just an emergency expense. iii. The health insurance sector demonstrates strong growth potential supported by technology integration and regulatory frameworks. iv. Consumers often face difficulties in selecting appropriate health insurance plans, highlighting the need for more government promotion and agent involvement in education. v. Demographic factors such as age, gender, income, and marital status significantly influence health insurance purchasing decisions. vi. Product-specific factors like premium amount and coverage type have less impact on the choice between public and private insurers. vii. Consumer satisfaction depends on transparent service, innovative products, agent engagement, and efficient claim settlements. viii. Statistical analysis shows no significant relationship between annual income and the amount of premium paid, indicating that income may not be the primary factor influencing premium payments. IV. CONCLUSION The findings suggest that while awareness and education regarding health insurance remain inadequate, the sector holds significant growth potential with continued technological advancements and regulatory support. Consumer decisions are influenced more by demographic characteristics than by specific product features. Moreover, income does not appear to significantly affect premium payments, implying that other factors play a larger role in health insurance adoption. To enhance uptake and satisfaction, it is essential to improve consumer awareness, provide accessible information, and ensure high-quality, transparent services. DECLARATION STATEMENT After aggregating input from all authors, I must verify the accuracy of the following information as the article's author. ▪ Conflicts of Interest/ Competing Interests: Based on my understanding, this article has no conflicts of interest. ▪ Funding Support: This article has not been funded by any organizations or agencies. This independence ensures that the research is conducted with objectivity and without any external influence. ▪ Ethical Approval and Consent to Participate: The content of this article does not necessitate ethical approval or consent to participate with supporting documentation. ▪ Data Access Statement and Material Availability: The adequate resources of this article are publicly accessible. ▪ Author’s Contributions: The authorship of this article is contributed equally to all participating individuals. REFERENCE 1. Garge, Deepali; Tare, Snehal; Das, Smarjeet. A Study on Consumers' Understanding of Health Insurance Benefits. Journal of Dental Research and Indian Journal of Management and Language (IJML) ISSN: 2582-886X (Online), Volume-5 Issue-2, October, 2025 33 Retrieval Number: 100.1/ijml.B209905021025 DOI: 10.54105/ijml.B2099.05021025 Journal Website: www.ijml.latticescipub.com Published By: Lattice Science Publication (LSP) © Copyright: All rights reserved. Review 7(Suppl 1): p S62-S64, February 2020. https://journals.sagepub.com/doi/10.4103/jdrr.jdrr_71_19 2. Madan Mohan Dutta; Health insurance sector in India: an analysis of its performance. VILAKSHAN - XIMB Journal of Management 16 December 2020; 17 (1-2): 97–109. DOI: https://doi.org/10.1108/XJM-07-2020-0021 3. Dr. V. M. Dandekar. Study The Scope for Growth of Health Insurance Market in Bilaspur Region, Review of Research, ISSN: 2249-894X, Impact Factor: 5.7631(Uif), UGc approved Journal No. 48514, Volume - 8 | Issue - 9 | June – 2019. https://oldror.lbp.world/UploadedData/9731.pdf. 4. Yadav, Chette Srinivas and Sudhakar, A., Impact of Socioeconomic Factors on Purchase Decision of Health Insurance: An Analysis (July 2018). The IUP Journal of Management Research, Vol. XVII, No. 3, July 2018, pp. 34-45, Available at SSRN: https://ssrn.com/abstract=3311355. 5. ChetteSrinivasYadav and A Sudhakar, 2017, Personal Factors influencing purchasing decision: A study of the health insurance sector in India, Vimaquest, Vol. 17, Issue 1-A. May 2017. http://www.bimaquest.niapune.org.in/index.php/bimaquest/article/view /9 6. Pawan Kumar GD. “A Study of Consumers’ Preferences and Perceptions on Life and Medical Insurance”, Osmania Journal of International Business Studies 2016;11(1):209-222. https://www.researchgate.net/publication/318851747 7. Roshani, P., Selvalakshmi, V., Sujatha, L., Shinde, G., Siddiqui, M. F., & Mengesha, E. A. (2022). Analysis of consumer behaviour in the health insurance sector. International Journal of Health Science 6(S5),1654-1668. DOI: https://doi.org/10.53730/ijhs.v6nS5.8955 8. Sini V, Karpagam CR. “A Study on Policy Holders Awareness and Preference Towards Health Insurance”, International Journal of Scientific Research and Modern Education 2016;1(2):23-28. DOI: https://doi.org/10.5281/zenodo.62012 AUTHOR’S PROFILE Dr. N. Ramanjaneyulu is working as Professor and Head in the Department of Master of Business Administration at MLR Institute of Technology (Autonomous), Hyderabad, India. He has 16 years of teaching experience in the field of management studies. He has published more than 50 research papers in various reputed National and International journals and Conferences with high-impact factors. He authored 15 Indian patents and one book on Managerial Economics in 2021. He received the Best Editor Award from the International Journal of Research in Management Studies. Under his supervision, two scholars have received their PhD, and one scholar is pursuing a PhD. His areas of interest are Financial Management, Financial Derivatives, Security Analysis and Portfolio Management, Financial Accounting and International Financial Management. Dr. G. Hari Kumar is an Assistant Professor at Sri Sai Baba National Degree College (A), Anantapur, Andhra Pradesh, with over 11 years of academic experience in finance, taxation, and management. He has a strong track record in teaching and research, having published extensively in reputed journals, as well as several books and book chapters. He has also qualified for both the AP-SET and UGCNET in 2019, demonstrating his academic excellence and subject expertise. His work reflects a deep commitment to advancing knowledge in the fields of commerce and management. Mrs. M. Umrez is working as an Assistant Professor in the Department of Master of Business Administration at MLR Institute of Technology (Autonomous), Hyderabad, India. She is pursuing Ph.D. in the field of marketing. Also qualified for AP-SET. She has 14 years of teaching experience. Published research papers in reputed national and international journals, and also presented papers at conferences. Her areas of interest include Consumer behaviour, Sales and Promotions Management, Retailing Management, and Product and Brand Management. Disclaimer/Publisher’s Note: The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of the Lattice Science Publication (LSP)/ journal and/ or the editor(s). The Lattice Science Publication (LSP)/ journal and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions, or products referred to in the content.