Even as awareness for insurance has increased in the country over the last one year, urban India continues to feel financially insecure, according to a survey. Max Life Insurance Company (Max Life) on Wednesday unveiled the findings of the second edition of its flagship survey 'Max Life India Protection Quotient' 2.0 in association with KANTAR.
The sample size of the survey conducted between December 2019 to Januayr 2020 was 7,014, wherein 25 cities were covered -- 6 metros, 9 tier I and 10 tier II cities. Of the other parameters, the survey asked questionnaire from people (between 25-55 years) having annual household income of Rs 2 lakh and above, as well as those who were decisions makers or influencers of financial products.
India Protection Quotient moved up by 2 points to 37, as per the survey. The survey witnessed an increase in India's level of term insurance awareness, term insurance ownership and protection quotient over the last 12 months.
However, with a movement of 2 points on the protection quotient scale from 35 to 37, it indicated that urban India continues to feel financially insecure. The knowledge Index at 48, rose 9 points and life insurance ownership surged 500 bps to 70 per cent from last year. Term insurance ownership increased 700 bps to 28 per cent, whereas term awareness jumped 1,000 bps to 57 per cent.
Also, the knowledge index across cities moved up by at least 6 points and Delhi continues to lead with protection quotient of 47. The study said that while South India continued to outperform other regions with protection quotient of 40 and life insurance ownership of 77 per cent, Western India witnessed the most significant growth of 7 points in life insurance ownership at 64 per cent.
Delhi and Hyderabad led with the Protection Quotient of 47 and 46, respectively, while Ludhiana despite witnessing the maximum growth from last year, continued to have the lowest level of 27 this year. Chennai is the only city to witness a decline from last year on the quotient. Term insurance products witnessed the highest rise in awareness (1,000 bps to 57 per cent) and ownership (700 bps to 28 per cent) among different product categories such as market linked insurance and endowment products.
Over the year, millennials have grown more anxious about financial security with their top anxieties being day to day medical expenses and sustaining lifestyle. When compared, women remained more anxious about financial security than men across several parameters. The survey also revealed that Tier II cities focus more on savings than protection, and demonstrated a preference of endowment polices over term insurance, as per the findings of the survey.
"Outcomes of IPQ 2.0 gives me the confidence that Indian Life Insurance industry is moving in the right direction. Sharp increase in awareness and ownership of life insurance and term insurance can be seen as a precursor to higher protection quotient in the years to come," Max Life Managing Director & CEO Prashant Tripathy said. The survey also gave the industry some deep insights for future such as the growing reception towards health apps in return for discounted premiums that young India is reflecting preference for, return of premium as the key feature, continued preference for human sellers and growing awareness about insufficiency of cover among other such findings, he said.
"It has been observed that Indians do not give much thought to this basic element of financial planning due to which awareness level about life insurance products for financial protection is low. Further to an insightful survey conducted last year... to uncover prevalent attitudes and behaviour that could help scale the overall adoption of life insurance, thereby building financial security of the nation," Soumya Mohanty, Managing Director and CCO, Kantar Insights, South Asia, said..
