NEW DELHI: Term insurance products are gaining traction as households are being proactive about financial planning due to heightened anxieties around unemployment and untimely death of the family breadwinner in the time of COVID-19 crisis, a survey said.
The Max Life India Protection Quotient (IPQ)- Express survey also noted that job security, medical security, and financial security of the family in the absence of a breadwinner are more important to people now than before the COVID-19 era.
According to the survey, term insurance is the most preferred life insurance category during COVID-19 and 83 per cent respondents believe that the situation demands one to be more proactive about financial planning.
The survey has a total sample size of 1,864 respondents across 6 metros, 9 Tier 1 and 10 Tier 2 cities.
The term insurance ownership was highest across different categories of life insurance products, with 41 per cent metro respondents owning term products against 22 per cent who owned market linked products and 39 per cent who owned endowment products, the survey showed.
In Tier 1 cities, the term insurance ownership stands at 37 per cent as against 15 per cent who owned market linked products and 29 per cent who owned endowment products, it said.
“While 64 per cent respondents in metros said security of job/current business/ stable income is more of a worry to them now than before COVID-19, only 51 per cent in Tier 1 said it had become more concerning to them,” the survey said.
Max Life Insurance MD Prashant Tripathy said:”Digitally savvy urban India is feeling attitudinally less secure about financial protection in the wake of this crisis. As per the survey, an essential today for over 80 per cent of the households is being proactive about financial planning especially with heightened anxieties around unemployment and untimely death of the family breadwinner.”
The survey further said 57 per cent in metros as against 53 per cent respondents in Tier 1 cities said that financial security of the family in the absence of the breadwinner is more worrying now than before COVID-19 period.
Inadequacy of funds in case of critical illness is a bigger anxiety for 57 per cent respondents in metros as against 49 per cent in Tier 1 cities, when compared to the period before COVID-19.
The survey showed that 1 in 4 consumers took COVID-19 or critical illness rider upon realisation of getting infected by coronavirus.
It noted that there was a protection quotient of 47 during this period despite a relatively high awareness and better ownership of life insurance products by the digitally savvy, urban respondents.
Respondents across metros and Tier 1 cities, revealed a high Knowledge Index at 68 and life insurance ownership at 79 per cent.