A staggering 75 per cent of health insurance buyers in India have coverage of Rs 10 lakh or less. Non-buyers also display a severe underestimation of medical costs.
New Delhi: It is very important to ensure that your loved ones are well protected, and term insurance is one of the ways to do so. Term insurance plan is the easiest way to secure the future of your family as it offers high coverage at affordable premiums. Despite this differentiating factor, nearly half of India still ignores term insurance. According to a recent survey, 47.6 per cent of India are not even aware of term insurance and its benefits. However, the survey said that there are sings of improvement.
“The awareness gap remains one of the biggest barriers to term insurance adoption in India. The survey found that 47.6 per cent of Indians are unaware of term insurance and its benefits. However, there are signs of improvement,” Policybazaar said in its latest survey titled ‘How India Buys Insurance 2.0’.
As a result, industry-wide, term insurance grew by 18 per cent in FY24, compared to a CAGR of just 2 per cent over the past five years.
“This year’s report puts a spotlight on the awareness gap even more evidently than before. A large proportion of consumers plan to sell ancestral assets or borrow money during a crisis rather than opt for simple, accessible solutions like health and life insurance to protect their families,” Sarbvir Singh, Joint Group CEO, PB Fintech.
The survey, which is based on a survey of 3,955 respondents across 27 metros, Tier-2, and Tier-3 cities in India, found that 56 per cent of respondents who are aware of term insurance have a positive attitude toward purchasing it.
The report uncovers several key insights, including the fact that Indians continue to severely underestimate healthcare costs—nearly 48 per cent of policyholders opt for coverage of Rs 5 lakh or less.
Key Findings of The Survey
Indians continue to favour traditional financial investments such as gold, fixed deposits, insurance-linked savings schemes, and real estate. According to the survey, 28.3 per cent of respondents ranked health insurance above equities, mutual funds, and government bonds.
A staggering 75 per cent of health insurance buyers in India have coverage of Rs 10 lakh or less. Non-buyers also display a severe underestimation of medical costs.
87 per cent of term insurance non-buyers critically underestimate their family’s financial needs.
