Indian Millennials are financially prudent. However, they need to be guided when it comes to life insurance, according to a survey done by Tata AIA Life Insurance with Indians in the age group of 22 – 35 years.
The survey shows people in the age group of 30-35 years are better at financial planning, with 44 per cent remaining unaffected by the economic impact of the Covid-19 pandemic.
Covid-19 hit hard across the world, and India was one of the most affected countries. Interestingly though, young Indians’ savings were not severely impacted. 40 per cent of the respondents did not alter their savings plan during Covid-19.
The company claims Indian Millennials seem to have realized the importance of maintaining a healthy savings regime even as the external scenario remains uncertain and ever-changing.
Even as Covid-19 impacted the country and the world in recurring waves, data from the report states, more than 64 per cent of the respondents in the chosen age group either maintained or increased their savings during the pandemic. If one were to break the Millennials further into age bands, the results were truly encouraging – while 70 per cent of those in the age group 30 – 35 increased or maintained the proportion of savings, 68 per cent of those in the 22 – 25 years age band displayed similar behaviour. This indicates that people are showing responsible financial behaviour from an early age.
While ensuring a healthy savings ratio, the insurance company says, Indian millennials across age bands believe in planning their own investments rather than depending on others. This shows their level of confidence in themselves. Given their comfort in accessing online platforms and researching the entire process, this trend is poised to continue in the future. It was only in the youngest age band within Millennials i.e., 22 – 25 years wherein 1 in 5 respondents showed dependency on their parents in deciding on the right financial investment. On the other hand, the report showed 90 per cent of those in 26 – 29 and 96 per cent of those in 30 – 35 took their own decisions when it came to financial planning and investing.
When one looks at the geographical differences, the findings are not surprising. Those in metros did show a higher level of independence with 93 per cent taking their own decision regarding financial planning. This behaviour was marginally lower for those in Tier 1 and 2 towns with 89 per cent taking their own financial decisions. Interestingly, the report states, a small percentage of respondents in metro and tier 1 cities relied on financial experts whereas those in tier 2 relied completely on their parents when not taking their own decision regarding putting their hard-earned savings into the right instrument.
Amid the encouraging habits toward financial prudence, the company states Indian Millennials are yet to become fully aware of and understand solutions such as life and health insurance. While 57 per cent of those in the 30 – 35 age group were aware of life insurance, only 20 per cent among the 22 – 25 years affirmed this aspect. Similarly, when it came to health insurance, 57 per cent between 30 – 35 years were aware of the category but only 19 per cent responded in the positive among the 22 – 25 years age band.
Interestingly, among those who had secured themselves with life insurance, 43 per cent believed they were adequately protected. However, a similar 41 per cent felt the other way, being unsure if they had taken a policy with sufficient cover. The company says, this clearly indicates the need to equip Indian Millennials with the right information and understanding of the level of insurance required as they move through different life stages.
Venky Iyer, EVP and Chief Distribution Officer say, “The survey clearly indicates the need for insurers to work hand in hand with younger consumers to help them understand the level of insurance that they need as they progress through different stages in life. At the same time, it is important for us to help them appreciate the diverse solutions that life insurance offers across protection, savings, retirement, and wealth generation-oriented offerings, thereby ensuring that they are well secured while they strive to do their best in all walks of life.”
Key Survey Findings;
· The survey reveals that young Indians’ savings were not severely impacted during the pandemic period.
· 40 per cent of the respondents did not alter their savings plan during the Covid-19 period.
· Young Indians seem to have taken cognizance of the uncertainties and have increased their savings to counter future emergencies.
· 30 per cent of people in the age group of 22-25 years have upped their savings ratio as learning from the Covid-19 catastrophe.
· Most of the respondents across the age band 22 – 35 years continued to save even amid the uncertainties introduced by Covid-19.
· When it came to life insurance, those in the younger age band i.e., 22 – 25 showed low awareness.
· Amid the aware and invested in life insurance, 41 per cent were not sure if they were adequately secured.