A large majority of Indian households remain financially exposed to medical shocks, with nearly 80 per cent lacking adequate emergency savings and over four in five worried about rising healthcare costs, according to a recent study अNishchit Index 2.0 by Aditya Birla Sun Life Insurance.
The अ-Nishchit Index 2.0 is based on 3,583 respondents across 20 towns and 21 qualitative interviews.
It measures uncertainty across 11 parameters and 49 attitudinal statements, placing India’s national uncertainty score at 79.
Multiple risk indicators flash warning
The data points to a broad-based financial vulnerability linked to health:
· 80 per cent doubt they have sufficient savings for emergencies such as critical illness
· 82 per cent are worried about rising healthcare costs affecting financial stability
· 79 per cent are unsure whether their insurance covers serious illnesses
· 81 per cent expect pollution levels to worsen, raising long-term health and cost risks
· 81 per cent report rising mental health concerns, yet 80 per cent hesitate to seek professional help
Taken together, these indicators suggest that health-related financial risk is both widespread and underprepared for.
Health costs becoming a recurring expense
The study shows a shift in how households experience medical spending from occasional shocks to repeated outflows. Pollution-linked illnesses, extreme heat, and seasonal diseases are becoming more frequent, increasing dependence on regular treatment, diagnostics and medication.
This is also reflected in sentiment data, where environmental and climate factors now rank as the second-largest driver of national anxiety, pushing India’s overall uncertainty score to 79.
In effect, households are increasingly factoring in healthcare as a recurring budget item rather than an unforeseen contingency.
Insurance awareness remains low
Despite heightened concern, financial preparedness through insurance remains weak. Nearly four out of five respondents (79 per cent) are uncertain about their policy coverage for serious illnesses.
This gap is critical because treatments for major illnesses such as cancer or chronic respiratory diseases can involve prolonged care and high out-of-pocket expenditure. Limited understanding of policy terms, exclusions and caps further compounds the risk.
Regional data shows uneven impact
The study also highlights regional variation in how health risks translate into financial stress:
· North India: Higher reporting of climate-linked illnesses and disrupted daily routines
· East India: Increased anxiety driven by elderly care and associated costs
· South India: Rising cases of vector-borne diseases amid higher temperatures
· Western metros: Pollution and heat impacting both health and productivity
These variations indicate that financial exposure to health risks depends significantly on local environmental conditions and demographic factors.
Climate risks reshaping financial behaviour
Among financially active households, especially in Tier-I and II cities, there is early evidence of behavioural change. Extreme weather events, including heatwaves, floods and heavy rainfall, are increasingly seen as recurring financial shocks, not one-off disruptions.
This shift is more pronounced in Tier-II and III towns, where uncertainty levels are higher and financial buffers are thinner.
Mental health emerges as hidden cost
Mental health is becoming a parallel financial risk. While 81 per cent report increased concerns, nearly 80 per cent avoid professional support, potentially leading to productivity loss, absenteeism and long-term income disruption.
What this means for household finances
The data suggests a widening gap between awareness and action. While risks are clearly recognised, preparedness, in terms of savings and insurance, remains inadequate.
Households may need to recalibrate financial planning with a sharper focus on health risks by:
· Building larger emergency buffers to absorb repeated medical expenses
· Reviewing health insurance for adequacy and critical illness coverage
· Accounting for location-specific climate and pollution risks
· Factoring in mental healthcare as part of overall financial planning
With environmental and health uncertainties rising simultaneously, the cost of inaction could be significant. The findings underline that financial resilience today is increasingly tied to how well households prepare for health-related risks.
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