Financial security gains importance after Covid: Max Life survey
India’s awareness of life insurance has increased significantly over the past two years due to COVID, and the need for financial security has become a priority among people, according to Max Life’s annual flagship survey.
Launching the 4th edition of India’s Protection Quotient (IPQ) survey on Wednesday, the life insurer said urban India’s ‘protection quotient’ rose by 3 points to 50, witnessing a gradual increase from previous editions of the IPQ.
The trend line reflects a steady growth in the country’s overall financial protection that has led to prioritizing financial security over all other aspects.
According to the survey, with COVID-related fears now fading, policyholders in urban India have realigned their long-term goals in raising children and planning for retirement.
The survey was conducted online from December 10, 2021 to January 14, 2022 among 5,729 respondents across 25 Indian cities.
Even though COVID-induced anxieties have diminished, well-being has become a major concern, according to the IPQ, and increased levels of security in all areas have led to an overall increase in the protection quotient.
The survey indicates a marginal increase in the knowledge index of urban India from 68 to 69, while the safety index increased by 5 points to 56.
The survey conducted by Max Life in partnership with Kantar, is a kind of compass to show how policyholders behave. This year, the survey revealed that awareness of life insurance has increased compared to the previous year, said Prashant Tripathy, managing director and CEO of Max Life Insurance in an interaction.
“I have to say that when COVID happened there was a drastic increase in awareness. I’m very happy that higher levels of awareness are continuing. Despite COVID setting in, I think people are feel more secure, which is good news Awareness translates into If we look at the ownership of buying insurance at the term level, savings level, unit-related level – in each d them, we saw an improvement,” he said.
According to the survey, the metros, as well as the cities of level 1 and 2 have experienced an increase in the protection index. Level 2 saw a significant increase in awareness of life insurance from ages 61 to 68. This indicates strong potential in Tier 2 markets for life insurance adoption.
Tripathy said people are now buying multiple fonts, they now have a much higher level of understanding, ownership and awareness across all product levels.
“Term insurance has seen an increase over the past two years, with ownership up significantly to 43% from 39% last year.”
The survey also reflects an increase in ownership of other life insurance products among urban Indians such as savings and market-linked plans.
“The past two years have indeed been challenging due to the pandemic, but we have also witnessed an upside with the development of India’s financial resilience. This is evident from the IPQ 4.0 insights which show a strong sense of financial security among urban Indians,” Tripathy said. .
However, he also highlighted the challenges for the industry as 1 in 4 urban Indians associate long term plans with high premiums.
“Despite the positive movement, the survey also points to key challenges for the industry that need to be addressed. Although India has realized the real value of term insurance, the barriers that exist limit efforts to raise awareness and adoption down to the last mile.
“The IPQ study will help us create customer-centric measures to address these issues, while enabling collective accountability to build a higher level of trust with customers,” he added.
There is an increasing importance of the sum insured when purchasing term insurance. According to the study, more than half of urban Indians feel their term insurance plan coverage is insufficient and coverage/sum is assured, endorsements and customization have become key parameters for long-term purchase .
“People are now prioritizing the sum insured rather than the premium or how often the premium comes out,” Tripathy said.
The survey also noted that millennials were on par with non-millennials when it came to buying term insurance, and women were on par with men when it came to the coverage index, as there were a significant increase in women in security levels.
The salaried segment noted an improvement in all key indices, the self-employed saw a decline in term insurance ownership.
Soumya Mohanty, Managing Director and CCO, Kantar Insights, South Asia, said the IPQ is an important financial signifier for the country, especially at present.
“With IPQ 4.0, we have conducted a comprehensive digital survey of a robust sample that has given us unique insights into the financial evolution of urban India. The key finding that emerges from the survey is the significant increase safety levels of the urban. Despite the unprecedented impact of Covid-19, this is an important indication of the growing financial awareness in the country,” Mohanty said.
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