Urban Indians are becoming less confident about their financial security.
Up to 58% of them fret over financial independence post-retirement, which is a 4% increase from last year. An equal share of urban Indians worry about meeting their daily medical expenses and sustaining their current lifestyle once they stop working.
The findings are part of a survey published by Delhi-based Max Life Insurance in association with London-based consultancy Kantar. The firms surveyed 7,014 respondents in 25 cities, including six metros, nine tier-1 cities, and 10 tier-2 cities, between December 2019 and January 2020.
A significant share of urban Indians also say their families will have no financial support in the event of the breadwinner’s death. In such a scenario, around 57% believe the family savings will exhaust within a year.
The financial insecurity is leading to the increasing popularity of term insurance plans in urban India. Such pure insurance products provide an assured sum to the nominees in the event of the insured person’s death but have no survival benefits.
Term insurance penetration in the country stands at 28%, a 7 percentage point increase from last year, according to the survey. This, however, pales in comparison to the ownership of overall life insurance products, which stands at 70%, a 5 percentage point increase from last year.
Millennials and insurance
While millennials are just as aware of life insurance products as older people, they have lower ownership.
Millennials in tier-2 cities, in particular, lag in awareness and ownership.
Offline over online
Increasing usage of internet in the country notwithstanding, Indians still prefer to buy their insurance from agents rather than online, said the survey.
“People across the country give more importance to agents and brand goodwill while selecting a life insurance provider; reiterating the importance of owning a robust distribution network built on customer centricity and great brand recall,” said Prashant Tripathy, managing director & CEO of Max Life Insurance.