The findings mark an improvement in number of people buying health and term insurance compared to 2020
Over 90 per cent of Indians believe health and term insurances are important for their financial safety and mental wellbeing. They agree it is very important to stay protected, especially fearing the Covid situation. The findings are part of the annual survey conducted by Policybazaar.com to celebrate National Insurance Awareness Day, 2021.
The survey was conducted to understand the impact of Covid-19 on insurance awareness and purchase behaviour of Indians in the last 15 months. Policybazaar surveyed over 6,000 existing customers who bought term, health and motor insurance from the platform. The survey was fielded to respondents between June 18 and June 21, 2021.
Motivated by the fear of contracting Covid-19, 61 per cent of respondents invested in a comprehensive health plan followed by 10 per cent who went for Covid-specific policies. As per the survey findings, high medical costs (40 per cent), fear of Covid-19 and tax-saving benefits were the primary reasons that triggered people to buy a health cover. Nearly one-fourth respondents received Covid claims for treatment at home/domiciliary, while claims approved for those treated at hospital stood at 77 per cent.
Since the onset of the pandemic, there has been a significant increase in porting requests. This is largely because people are looking for policies with higher sum insured and better features. The survey findings reveal that 7 out of 10 people wish to port their health policies to a different insurer for a higher sum insured and better features like zero co-payment, no room-rent capping, and lower waiting periods.
When it comes to life insurance, the findings revealed over 3/4th respondents purchased term insurance in the last 2 years owing to Covid fear. Nearly 9 in 10 respondents who purchased a term plan considered it as a means to protect their family’s financial future and not merely as a tax saving instrument (2 per cent). The survey findings denote that 72 per cent respondents bought their first term plan online from Policybazaar. When choosing the sum assured 60 per cent Indians bought a term plan cover ranging between Rs 50 lakh-Rs 1 crore, 25 per cent chose a cover above Rs 1 crore.
Ideally, the sum assured of your term plan should be 15-20 times your annual income, while the policy tenure should be until your retirement age. Interestingly, 6 out of 10 Indians buy a term plan with cover up to 61-81 years of age — the most common retirement age in India.
“During unprecedented times like these, it is important to understand our customer’s outlook towards insurance products and serve them with the right solutions specific to their needs. A well-insured nation is always better equipped to deal with economic uncertainties. It is evident that protection products are becoming the foundation of financial planning especially considering the impact of Covid-19. The pandemic has definitely accelerated awareness around insurance and the quest to buy the right insurance plans,” said Sarbvir Singh, CEO, Policybazaar.com.
Covid-19 seems to have influenced the purchase behaviour of customers, as 95 per cent now preferred to renew their car insurance online, while only 5 per cent preferred offline mode. In the last 15 months, over 80 per cent of respondents renewed their motor insurance while the remaining 20 per cent chose to skip renewal, following which, they missed-out on renewal benefits like no-claim bonus and lower premiums.
Keeping in mind the nation-wide lockdown, Policybazaar came up with Third Party + Fire + Theft motor insurance policy to ensure coverage of vehicles at affordable premium. Almost 6 in 10 people bought this plan for cheaper premium and less usage — the two key features of the plan. The findings convey nearly 70 per cent Indians chose a comprehensive cover for their vehicle and not just the mandatory third-party cover.