A Study of Influencing Factors in Health Insurance Policy Decision Making Among Consumers

Abstract

Health insurance has emerged as a crucial financial safeguard for individuals and households amid rising healthcare costs and increasing uncertainty related to medical emergencies. Despite wider availability of both government and private health insurance policies, consumers often face complexity and hesitation while making purchase decisions due to intangible benefits, procedural requirements, and uncertainty surrounding claim settlement. The decision-making process is influenced by multiple economic and service-related factors that shape consumers’ perceptions of affordability, ease, trust, and reliability. Among these, premium amount, processing convenience, and claim settlement efficiency are considered critical determinants, as they directly affect both initial policy purchase and long-term renewal behaviour. Understanding how these factors influence consumers differently across public and private insurance options is essential for improving insurance penetration and consumer satisfaction.

The present study examines the influence of premium amount, processing convenience, and claim settlement efficiency on health insurance policy decision making among consumers, with a comparative perspective between public and private health insurance policies. Empirical findings reveal that premium amount significantly influences policy selection, with public insurance schemes perceived as more affordable and consistent in pricing. Claim settlement efficiency emerges as a decisive factor favoring private insurers, reflecting higher confidence in faster, transparent, and more reliable claim handling. However, processing convenience shows no significant difference between public and private policies, indicating convergence in procedural ease due to digitalization and service improvements. The study highlights that while affordability attracts consumers toward public schemes, trust in claim settlement strongly drives preference for private insurers. The findings provide valuable insights for insurers and policymakers to design consumer-centric products, simplify processes, and strengthen trust mechanisms to enhance adoption and retention in the health insurance sector.