Awareness about term insurance has grown, medical expenses more crucial today, finds survey
Slowly but gradually, we are seeing urban India move towards proactive financial planning that can avert anxieties and help build resilience.”
With the outbreak of Covid-19 pandemic, urban Indians have become more anxious about financial security and are increasing their savings and investments. The savings objectives have shifted from education and marriage of children to medical expenses and old age and the awareness about term insurance has grown. These were the findings of the third annual Max Life’s India Protection Quotient Survey.
Rise in IPQ Urban India’s Protection Quotient has grown to 39, up four notches from last year’s survey; Knowledge Index —awareness about life insurance products—has grown to 55, an increase of 9 points during the same period. The survey shows a significant growth of Knowledge Index across all cities, age and gender, highlighting responsible outlook of urban India. However, due to uncertain times, the degree to which urban Indians feel financially secure and prepared for the Security Level dipped by 300 bps to 57%.
India Protection Quotient is the degree to which Indians feel protected from future uncertainties, on a scale of 0 to 100. It is a proprietary tool developed in partnership with Kantar and is based on the attitudes, mental preparedness around future uncertainties, awareness, and ownership of life insurance product categories (term, endowment and unit-linked insurance plan).
Prashant Tripathy, managing director and CEO, Max Life Insurance says that the idea behind India Protection Quotient, when launched three years ago, was to make Indians more aware about the benefits of financial protection in the contemporary world. “IPQ 3.0 survey reveals that while issues surrounding financial preparedness were magnified during the challenging Covid-19 times, there are long-term lessons to be learned when it comes to addressing and acknowledging financial protection. Slowly but gradually, we are seeing urban India move towards proactive financial planning that can avert anxieties and help build resilience.”
South India leads Zone-wise South India continues to be most protected with Protection Quotient at 41, followed by North with 39, West with 38 and East with IPQ of 36. With a Protection Quotient of 43, metros continued to feel most financially protected during Covid-19. This was followed by Tier 1 cities which demonstrated a Protection Quotient of 38 and Tier 2 cities at 33. Tier 1 cities witnessed a sharp rise in awareness of life insurance products, from 46 to 54, as well as ownership that now stands at 66% compared to 62% previously. Delhi led with a Protection Quotient of 50 raking a 3-point increase in comparison to IPQ 2.0.