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Business News/ Insurance / News/  Life insurance ownership in India remains at 78%: Survey

Life insurance ownership in India remains at 78%: Survey

The survey was done by Max Life Insurance in partnership with Kantar. 

With increasing immunization coverage and a growing positive outlook beyond Covid-19, the ‘Protection Quotient’ of urban India has moved 3 points to 50, witnessing a gradual rise from previous IPQ editionsPremium
With increasing immunization coverage and a growing positive outlook beyond Covid-19, the ‘Protection Quotient’ of urban India has moved 3 points to 50, witnessing a gradual rise from previous IPQ editions

Max Life Insurance Company Ltd. in partnership with Kantar, on Thursday, launched the fourth edition of the India Protection Quotient survey (IPQ). Conducted entirely online, the India Protection Quotient 4.0 surveyed 5,729 respondents across 25 Indian cities, between 10 December 2021 to 14 January 2022, making this one of the most comprehensive financial studies carried out during the recent wave of Covid-19.

With increasing immunization coverage and a growing positive outlook beyond Covid-19, the ‘Protection Quotient’ of urban India has moved 3 points to 50, witnessing a gradual rise from previous IPQ editions. The trend line reflects a steady growth in the country’s overall financial protection that has led to prioritizing financial security over all aspects.

The survey indicates a marginal increase in urban India’s knowledge index from 68 to 69, while the security index increased by 5 points to 56%. Metros, Tier 1 and Tier 2 cities also witnessed an increase in the protection index, while Tier 2 saw a significant rise in life insurance awareness from 61 to 68. This indicates a strong potential in Tier 2 markets for life insurance adoption.

Term insurance witnessed an uptake in the last two years, with ownership rising to a significant 43% from 39% last year. The survey also reflects an increased ownership of other life-insurance products amongst urban Indians such as savings and market-linked plans.

Commenting on the launch of IPQ 4.0 survey, Prashant Tripathy, managing director and CEO, Max Life Insurance said, “The last two years have been indeed challenging due to the pandemic, but we also witnessed an upside with India developing financial resilience. This is evident from the insights in IPQ 4.0 that show a strong sense of financial security amongst urban Indians."

He further added, “Despite the positive movement, the survey also indicates key challenges for the industry that need to be addressed. While India has realized the real value of term insurance, existing barriers are limiting efforts to drive increased awareness and adoption till the last mile. The IPQ study will help us create customer-centric measures to resolve these issues, while enabling collective responsibility to build a higher level of trust with customers."

Soumya Mohanty, managing director and CCO, Kantar Insights, South Asia remarked on the findings of the survey, “India Protection Quotient is an important financial signifier for the country, especially in the current times. With IPQ 4.0, we have administered a complete digital survey across a robust sample that has given us unique insights on how urban India has financially evolved. The one key outcome that emerges from the survey, is the significant increase in security levels of the urban milieu. Despite the unprecedented impact of Covid-19, this is an important indication of the growing financial consciousness in the country. We are happy to be partnering with Max Life Insurance as it continues to drive importance of life insurance across the country and hope the survey findings can outline the way forward for the insurance industry."

The following findings reveal insights that highlight urban India’s shift across financial priorities and anxieties studied by India Protection Quotient 4.0:

Financial preparedness of urban Indians

Life insurance ownership remains at 78%; investment seen in more diverse life insurance products

While the survey noted no change in the life insurance ownership from IPQ 3.0 Express, the respondents built a holistic portfolio by investing more in life insurance products including term (43%), market-linked (19%) and savings plans (39%).

South zone leads in protection index; trend also visible in metros, Tier 1 and Tier 2 cities

IPQ 4.0 noted an increase in protection quotient for South zone from 49 to 51 followed by North (50), East (49) and West (49) zones respectively. Metros saw a significant rise in security levels from 48% (IPQ 3.0 Express) to 56% in this survey, while Tier 2 cities gained 7 points in awareness of life insurance products and reached 68. With increasing awareness about life insurance, the metros and Tier 1 and Tier 2 cities are gradually rising at par

Anxieties and outlook towards financial protection

Majority of Covid-induced anxieties lessen, wellbeing becomes a key concern

As per the survey, most of the Covid-related anxieties such as untimely death of the breadwinner and potential Covid-19 exposure reduced to 59% and 51%. However, personal well-being (62%) emerged as a key concern for urban India with the pandemic straining mental and physical health

Urban India inching back to normalcy with refocus on children’s education and retirement. Savings & investments continue to grow

A visible increase from IPQ 3.0 Express, 48% and 39% respondents are re-prioritizing their savings for children’s education and retirement planning. The focus has moved significantly from medical emergencies where 43% urban Indians, in comparison to 48% (IPQ 3.0 Express) are saving for unforeseen medical expenses. With sporadic lockdowns/restrictions continuing in the country, savings and investments further increased from 53% (IPQ 3.0 Express) to 56% in IPQ 4.0, with basic and luxury expenses reducing to 29% and 15%.

Safety becomes the ‘most valued currency’ with 88% preferring safe financial products Safeguarding their future against market uncertainties, IPQ 4.0 saw 88% respondents preferring investments in fixed deposits and guaranteed income life insurance plans. 11% have preferred to invest only in market-linked products such as mutual funds, shares, stocks and ULIP, as per the survey.

Disclaimer: The study was conducted in top 25 Urban metro, Tier 1 and Tier 2 cities; hence, its findings are representative of metro, Tier 1 and Tier 2 cities of Urban India only.

Metro – Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Mumbai. Tier 1 – Ludhiana, Jaipur, Lucknow, Patna, Bhubaneshwar, Vizag, Ahmedabad, Bhopal, Pune. Tier 2 – Dehradun, Moradabad, Guwahati, Bokaro, Kolhapur, Jamnagar, Raipur, Ujjain, Hubli-Dharwad, Tiruchirappalli. IPQ 3.0 Express vs IPQ 4.0 (digital versions) data comparison is amongst 25 markets only [6 metros, 9 Tier 1 and 10 Tier 2]. The minimum sample to conclude any findings of the study is 270 with an error margin of +/-5.964%.

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Published: 24 Feb 2022, 12:24 PM IST
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