More Indians are now understanding the importance of life insurance, and are using life insurance products to build financial immunity in the aftermath of the Covid-19 pandemic, according to the results of a survey by Ageas Federal Life Insurance.
The second edition of its FutureFearless survey further revealed that among insurance products, the intent to buy pure protection products was the highest (68 per cent), followed by moneyback policies (61 per cent).
Among those who had bought a life insurance policy in the past one year, term plans were the most popular (49 per cent), followed by moneyback policies (28 per cent).
The survey by YouGov India, a market research agency, involved 1,009 Indian respondents in the 25-60 years age group across 15 cities in India, along with non-resident Indians (NRIs) from the UAE, Saudi Arabia, Kuwait, Oman and Qatar).
YouGov India used a quota-based sampling approach to get a fair representation by gender, age and target markets to examine the intentions and attitudes of the Indian consumer towards life insurance in terms of their future requirements, purchasing behaviour in the recent past, and evaluation criteria.
According to the survey, the single-most important factor for buying a life insurance policy for a vast majority of those surveyed was financial protection for the family in case of untimely death (65 per cent). Other notable reasons were future recovery and/or gains, as well as saving for important milestones, such as children’s education and/or marriage and post-retirement, highlighting the fact that many still bought insurance as investment products.
That said, the number of people who bought life insurance for the sake of tax benefits was the least.
According to the survey, most people in the younger age group of 25-35 years bought life insurance for safe returns. Those in the middle-age group (25-35 years), bought it for saving for their children’s education and wedding expenses, while those in the 46-60 years age group, bought life insurance products for post-retirement savings.
For 37 per cent of the buyers, premium was a key deciding factor for choosing a life insurance policy. Only 20 per cent of buyers chose the coverage amount while buying a policy, the survey revealed.
Most buyers also relied on their agents and/or independent financial advisors for buying insurance products, the survey revealed. But now, with increasing digitalisation, which further accelerated during the pandemic, customers were also considering online channels, such as the insurance company’s website or mobile app, as well as insurance aggregators offering policies from different companies on one platform, the survey said.
“Internet searches and research from websites, along with core relationships (family, friends, and colleagues) have significant influence on their life insurance policy decisions. Independent financial advisors and agents, when used to inform purchase decisions (and not just used as a purchase channel), also tend to be notably influential,” the survey revealed.
Karthik Raman, chief marketing officer and head – products, Ageas Federal Life Insurance, said: “We saw that the Covid-19 pandemic caught people unaware. It had a devastating effect on the financial health of Indians, as the savings and investments of millions of families were impacted by the medical costs, economic uncertainty, job losses, and business slowdown. With the country now moving towards normalisation, the second edition of our FutureFearless survey was aimed at obtaining a deeper understanding of the current attitude of the Indian consumer towards life insurance and their buying behaviour.”
He added: “The survey results reveal valuable insights that underscore our view that with responsible financial planning and adequate investment in life insurance, consumers can significantly boost their financial immunity, safeguard themselves from life’s uncertainties, and lead a future fearless life.”