India: Half of policyholders fail to renew life plans in last five years
Source: Asia Insurance Review | Oct 2023
Nearly half (47%) of insured individuals in India said that they did not renew their insurance policies in the last five years as they had invested in other financial assets or savings as a means to ensure financial security without giving due consideration to the expenses in case of financial and medical emergencies, according to the findings of a study by SBI Life Insurance, conducted in collaboration with professional services firm Deloitte.
The Financial Immunity Study 3.0, titled “Demystifying the Consumer’s Illusions,” surveyed 5,000 respondents across 41 cities in India and uncovered critical insights.
Some of the key findings of this study highlighting the lack of financial preparedness include:
- 71% of uninsured respondents recognise the absolute necessity of insurance for achieving financial immunity.
- As many as 83 % of insured individuals acknowledge the critical role of insurance in attaining financial resilience.
- Despite 68% believing they are adequately insured, only 6% have sufficient coverage.
The study also noted that the key concern of consumers has shifted from medical expenses to inflation and the rising cost of living.
In addition, as many as 37% of consumers equate financial immunity with “having multiple sources of income” and 41% claim that having a ‘secondary income’ can strengthen financial immunity. Also, 52% of Indian households’ income is allocated to building financial immunity, by investing funds in savings, investments, life insurance, and health insurance schemes. Of the 52%, 17% is allotted for savings, 16% towards financial assets, 11% for life insurance and just 8% for health insurance.
Nearly 80% of respondents relied solely on employer-provided insurance policies. A