The recent Financial Immunity study 3.0, authored by SBI Life Insurance threw up some heartening, yet eye-opening insights on how India perceives financial immunity, and the ever widening gap between their dream financial health and the reality.
As per the survey, which covered 5,000 consumers from 41 Indian cities, 80% strongly believed that insurance is a critical component in building one’s financial strength. However, 94% of these individuals were found to have insurance policies which did not provide them with adequate coverage. Only 6% of this lot owned a policy that sufficiently covered them.
However, as the report positively revealed, those surveyed were actively working towards strengthening their financial health. On an average, Indians are allocating 52% of their annual income towards savings (17%), buying life insurance (11%), financial assets (16%) and health insurance policies (8%).
Despite currently being uninsured, 71% respondents believed insurance to be a critical lever for financial immunity. Infact, respondents with insurance self-rated themselves to be 9% more confident of their financial future than those who did not have one. And the most cited reason for not having a policy was due to budgetary constraints i.e. 29% respondents did not have enough funds to regularly pay premiums. 19% relied only on employer-provided insurance.
Even when it comes to employer-related insurance, 68% insured individuals were all but disillusioned, meaning that while they were under their employer’s insurance umbrella, it was hardly enough to protect them from the financial adversities of life. Only 6% actually had enough employer insurance cover for protecting themselves.
While purchasing an insurance policy, its flexibility in terms of premium payment and cover (32%) made up for the single biggest deciding factor. Simple documentation (16%) was the next biggest factor.
Almost 47% of consumers had reportedly surrendered or not renewed their policies in the last 5 years. Some of the major reasons given for that included loss of documents, poor returns and need of funds. But, in a reassuring development, 87% of uninsured respondents had every intention to purchase life insurance within the next 5 years. More encouragingly, 46% want to expedite the process by buying a cover within a year.
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