41% with child’s education as their major worry have not invested in any child insurance plan, 51% have not purchased any term plan.
Most Indians are feeling an increased uncertainty in life because of various economic and other factors and the extent of increase in uncertainty in last one year is equal to the increase in the last four years. The top three uncertainties are related to child’s education, family’s financial wellbeing and retirement.
Close to half of the respondents in the Protection Survey 2018 conducted by Aditya Birla Sun Life Insurance have a false sense of financial preparedness as they have not invested in the most suitable financial products to best tackle specific uncertainties. About 84% urban Indians feel life is extremely uncertain. The survey shows worries among salaried rose by 6% in the last one year and for businessmen by 13%. Businessmen owing to their increased uncertainty, can be seen investing more in financial products leading to their increased preparedness.
The second annual Protection Survey 2018 was conducted among 2,061 people in the age group 25 to 50 across 13 cities.
Most are underinsured
The survey shows while people realise the importance of life insurance cover, most have opted for it but majority are severely underinsured. Although more than 4/5th of the consumers are aware of the amount required to protect their family against financial uncertainties, the extent of actual cover is very low at just 1.67 times of the annual income. Ideally, life cover to income should be 10 times the annual income.
Most respondents have been investing in incorrect financial products to tackle their biggest uncertainties. For instance, 41% with child’s education as their major worry have not invested in any child insurance plan, 51% have not purchased any term plan.
Pankaj Razdan, managing director and chief executive officer of Aditya Birla Sun Life Insurance and deputy chief executive, Adiyta Birla Capital, says the survey is a real eye-opener as it reveals the preparedness of urban Indians towards protecting self and family.
Men show increasing uncertainty regarding life post retirement and women show higher increase in uncertainty regarding future value of money. Unusually, the biggest worry for women is the financial security of her family in case something happens to her, the survey revealed. While, more respondents with dual income feel that they are completely prepared to face any uncertainty in life (owing to high disposable income), a sharp increase towards preparedness was witnessed amongst single income respondents who have in turn started investing more in financial products. A significant increase in preparedness can be seen amongst women in 2018 vis-à-vis last year, this can be attributed to higher number of financial products that women have started investing in