India is aware, but remains uninsured?
The recent Financial Immunity Study 3.0 by SBI Life with Deloitte gave us a much-needed insight into India’s perception of financial immunity and the ever-widening gap between their desired financial health and the reality.
The survey of 5000 people from metros, tier 1, 2 and 3 cities in India tells us that 80% of the respondents are aware of the importance of life insurance in achieving financial immunity. Yet, 94% of the respondents believed that their existing insurance policies did not provide them with the adequate coverage.
When it came to confidence in their financial future, those who own an insurance policy were 9% more confident than those who were uninsured. A sign that insurance does positively affect your financial confidence.
But what is stopping Indians from buying life insurance?
At 29%, inadequate premium budget was the most cited reason, followed by 20% finding the process of purchasing a policy to be lengthy and tedious, then 19% rely on employer provided life insurance and don’t feel the need to buy individual life insurance, while 18% feel they don’t need life insurance because they have sufficient assets and savings, and finally 14% give up after their insurance proposal is rejected.
One area of concern is noted to be that of policy surrenders or non-renewal. 47% of the consumers reportedly surrendered or did not renew their policies in the past 5 years!
Some major reasons for this were noted to their need to invest in other financial instruments, budgetary constraints, need for funds, poor returns, neglect of renewal process and loss of documents.
Whatever the reason, it seems many customers remain possibly uninformed about the facility of borrowing against their insurance policies. These short term funds can be availed using their policy as collateral without any interruption in their insurance coverage.
While the expense of “insurance premium” is very much non-discretionary, it is often the first item to go when an individual faces immediate financial constraints and such a decision ends up hurting an one’s financial immunity.
Whether you are uninsured or under-insured, what would be a good time to buy life insurance?
Now. While it’s affordable.
Now. When you’re healthier and younger than you’ll ever be.
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