Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Personal Finance/  People in metros more anxious about income and job security: Survey
BackBack

People in metros more anxious about income and job security: Survey

The knowledge and ownership of insurance products was higher in the metros.
  • The survey also found a change in attitude in the lives of digitally savvy urban Indians.
  • Photo: iStockPremium
    Photo: iStock

    People in metros are more anxious than those in tier-I cities about job security, stable income, inadequate funds in case of a critical illness and increasing day-to-day medical expenses.

    Max Life Insurance and Kantar, a data and consulting company, surveyed digitally active and affluent consumers during the covid-19 period and found that despite knowledge and ownership of insurance products, urban Indians feel less secure amid the crisis.

    A city with a population of 40 lakh is generally classified as a metro, while cities with a population of 10-40 lakh and 5-10 lakh are considered as tier-I and tier-II cities, respectively.

    In its report titled India Protection Quotient Express: Covid-19 Edition, the insurer found that the security express level, which is the degree to which Indians feel financially secure and prepared in light of the current pandemic, was 55% in tier-I cities compared with 46% in metros. Over 1,800 individuals were surveyed online in 25 cities—six metros, nine tier-I cities and 10 tier-II cities—for the report. As much as 77% of the respondents were millennials.

    The knowledge and ownership of insurance products was higher in the metros. The survey found that 70% of respondents in metros were aware of insurance products against 66% in tier-I cities and 83% ownership of insurance products in metros against 75% in tier-I cities.

    Financial security, however, stands at 46% in metros whereas in tier-I cities, it was at 55%. “Though we had heard about pandemics, this is the first time this generation is experiencing it. And since the spread is global, every person is afraid and there is a lot of uncertainty. And an effective vaccine may take months. So the fear around job losses and salary cuts are adding to the financial insecurity of the urban salaried class who may already be stretched due to EMIs and other liabilities," said Melvin Joseph, founder, Finvin Financial Planners.

    The survey also found a change in attitude towards the life of digitally savvy urban Indians. As much as 83% of respondents said the situation demands them to be more proactive about financial planning, 83% said that home is the only safe place now and 79% said they’ve switched to more online shopping now. Further, tier-I cities are more secure about financial aspects such as fulfilling family needs, financial security of the family in the event of the untimely death of the breadwinner, child’s education and fulfilling the family’s luxury needs.

    This is the third edition of the survey. “We’ve seen movement in anxiety levels. Earlier, people would talk about being able to maintain a certain lifestyle and what will happen after retirement with increasing inflation and medical expenses but now people are most worried about their businesses and how they can ensure a stable income. The covid-19 cases have come closer to us due to the increasing rate of infection and this is making people in metros more anxious than other cities," said Prashant Tripathy, MD and CEO, Max Life Insurance.

    Saving objectives have shifted to more in the present as against future security and betterment, found the survey. Saving for covid-19 treatment, medical emergencies, and preparing for job loss has come to the forefront.

    Purchase of insurance

    At 41%, ownership of term insurance was found to be higher in metros, compared with tier-I and II cities. In metros and tier-I cities, 41% of consumers were triggered by the increase of coronavirus spread and said it’s important to have financial protection (by having a term plan) for self and family and another 37% were triggered to buy term insurance because they felt life is uncertain. The fact that term plans are cost-effective was another reason for the purchase.

    “With urbanization and nuclear families, people are now aware of the fact that only high-value term insurance can protect their family in the absence of the breadwinner. Covid-19 is a wakeup call for others who still believed that they can earn like this till 60 and retire safely. Insecurity around jobs and huge home loan liability adds to the worries of people in the current times. Adequate term insurance, decent health insurance coverage for the family beyond the corporate cover is a must for all," said Joseph.

    Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

    Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
    More Less
    Published: 16 Jul 2020, 03:27 PM IST
    Next Story footLogo
    Recommended For You
    Switch to the Mint app for fast and personalized news - Get App