With increased awareness of the importance of life insurance as a result of the pandemic, financial protection for the family in case of untimely death emerges as the standalone largest reason to purchase life insurance
Hyderabad/Mumbai : Ageas Federal Life Insurance, one of India’s leading life insurance companies, has announced the results of the second edition of its #FutureFearless survey that was carried out by leading market research agency, YouGov India. With the country emerging out of the COVID-19 pandemic, this edition of the survey examines 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.
Driven by the uncertainty due to the pandemic, Indians are utilizing their income to build financial immunity through investments, notably life insurance. Results of the survey revealed that the intent to purchase pure protection products (68%) was the highest, followed by moneyback (61%). Even among life insurance purchasers who have bought a policy within the past one year, term plans (49%) emerged as the most popular, followed by moneyback policies (28%).
One of the positives to emerge out of the pandemic has been an increased awareness about the importance of life insurance as financial protection from life’s uncertainties. The survey results indicated that the standalone largest reason to purchase life insurance is financial protection for the family in case of untimely death (65%). Other notable reasons to purchase include future recovery / gains as well as saving for important milestones in life such as children’s education / marriage and post-retirement. Interestingly, tax benefits in investments and returns were the least cited reason to purchase a life insurance policy.
The survey results also revealed that the reasons for purchasing life insurance varied by life stage. While safe returns resonated more among the younger age-group (25-35 years), saving for children’s marriage and education was more important to the middle-aged (36-45 years) and post-retirement benefits were of greatest concern to the older age-group (46-60 years).
With life insurance being a fairly complex product, customers continue to rely on agents or independent financial advisors as a key channel while purchasing plans. However, with increasing digitalisation which further accelerated during the pandemic, customers are also considering online channels such as the website or mobile app of the insurance company or bank, as well as insurance aggregators offering policies from different companies on one platform.
Customers also claimed that internet searches and research from websites, along with core relationships (family, friends, 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.
When choosing a life insurance policy, price perception i.e. premium amount to be paid (37%) is a key reason influencing choice and a more common concern than coverage amount (20%).
Commenting on the survey findings, Mr. Karthik Raman, Chief Marketing Officer and Head – Products, Ageas Federal Life Insurance said, “We saw that the COVID-19 pandemic caught people unawares. 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. 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 #FutureFearless life.”
Research Methodology
The results are based on a quantitative survey conducted by YouGov using the online (self-administered) methodology. The survey was administered to 1,009 Indian respondents between the ages of 25-60 years, across 15 cities in India, as well as NRIs located in the Gulf countries (UAE, Saudi Arabia, Kuwait, Oman and Qatar). A quota-based sampling approach was used to ensure a fair representation by Gender, Age and Target Markets.