Fourth edition of the survey highlights increase in term insurance ownership in Urban India
Key Findings of the Survey
• Normalcy sets in, urban India’s priorities re- baselined to long-term objectives of children’s education & retirement planning
• Most Covid-induced anxieties lessen, wellbeing becomes a key concern
• Rising security levels across all zones have led to an overall increase in Protection Quotient
• Urban Indians realize their ‘real value’, evident in growing significance of sum assured while buying term insurance
• 1 in 4 urban Indians associate term plans with high premiums, other barriers include hidden clauses in T&C, challenges in refund in case of claims
• More than half of urban Indians feel their term plan cover is insufficient; cover/sum assured, riders and customization become key term purchase parameters
• Millennials at par with non-millennials in term ownership
• Women at par with men in protection index, significant increase among women in security levels
• Salaried segment notes improvement across all key indices, self-employed witnesses fall in term insurance ownership
23rd February 2022, New Delhi: Max Life Insurance Company Ltd. (“Max Life”/ “Company”) in partnership with Kantar today launched the fourth edition of the India Protection Quotient survey (IPQ)*. Conducted entirely online, the India Protection Quotient 4.0 surveyed 5,729 respondents across 25 Indian cities [between 10 December 2021 to 14 January 2022], making this one of the most comprehensive financial studies carried out during the recent wave of Covid-19.
With increasing immunization coverage and a growing positive outlook beyond Covid-19, the ‘Protection Quotient’ of urban India has moved 3 points to 50, witnessing a gradual rise from previous IPQ editions. The trend line reflects a steady growth in the country’s overall financial protection that has led to prioritizing financial security over all aspects.
The survey indicates a marginal increase in urban India’s knowledge index from 68 to 69, while the security index increased by 5 points to 56%. Metros, Tier 1 and Tier 2 cities also witnessed an increase in the protection index, while Tier 2 saw a significant rise in life insurance awareness from 61 to 68. This indicates a strong potential in Tier 2 markets for life insurance adoption.
Term insurance witnessed an uptake in the last two years, with ownership rising to a significant 43% from 39% last year. The survey also reflects an increased ownership of other life-insurance products amongst urban Indians such as savings and market-linked plans.
Commenting on the launch of IPQ 4.0 survey, Prashant Tripathy, Managing Director and CEO, Max Life Insurance said, “The last two years have been indeed challenging due to the pandemic, but we also witnessed an upside with India developing financial resilience. This is evident from the insights in IPQ 4.0 that show a strong sense of financial security amongst urban Indians.”
He further added, “Despite the positive movement, the survey also indicates key challenges for the industry that need to be addressed. While India has realized the real value of term insurance, existing barriers are limiting efforts to drive increased awareness and adoption till the last mile. The IPQ study will help us create customer-centric measures to resolve these issues, while enabling collective responsibility to build a higher level of trust with customers.”
Soumya Mohanty, Managing Director and CCO, Kantar Insights, South Asia remarked on the findings of the survey, “India Protection Quotient is an important financial signifier for the country, especially in the current times. With IPQ 4.0, we have administered a complete digital survey across a robust sample that has given us unique insights on how urban India has financially evolved. The one key outcome that emerges from the survey, is the significant increase in security levels of the urban milieu. Despite the unprecedented impact of Covid-19, this is an important indication of the growing financial consciousness in the country. We are happy to be partnering with Max Life Insurance as it continues to drive importance of life insurance across the country and hope the survey findings can outline the way forward for the insurance industry.”
Notes to the editor:
The following findings reveal insights that highlight urban India’s shift across financial priorities and anxieties studied by India Protection Quotient 4.0:
FINANCIAL PREPAREDNESS OF URBAN INDIANS
• Life insurance ownership remains at 78%; investment seen in more diverse life insurance products
While the survey noted no change in the life insurance ownership from IPQ 3.0 Express, the respondents built a holistic portfolio by investing more in life insurance products including term (43%), market-linked (19%) and savings plans (39%).
• South zone leads in protection index; trend also visible in metros, Tier 1 and Tier 2 cities
IPQ 4.0 noted an increase in protection quotient for South zone from 49 to 51 followed by North (50), East (49) and West (49) zones respectively. Metros saw a significant rise in security levels from 48% (IPQ 3.0 Express) to 56% in this survey, while Tier 2 cities gained 7 points in awareness of life insurance products and reached 68. With increasing awareness about life insurance, the metros and Tier 1 and Tier 2 cities are gradually rising at par
ANXIETIES AND OUTLOOK TOWARDS FINANCIAL PROTECTION
• Majority of Covid-induced anxieties lessen, wellbeing becomes a key concern
As per the survey, most of the Covid-related anxieties such as untimely death of the breadwinner and potential Covid-19 exposure reduced to 59% and 51%. However, personal well-being (62%) emerged as a key concern for urban India with the pandemic straining mental and physical health
• Urban India inching back to normalcy with refocus on children’s education and retirement. Savings & investments continue to grow
A visible increase from IPQ 3.0 Express, 48% and 39% respondents are re-prioritizing their savings for children’s education and retirement planning. The focus has moved significantly from medical emergencies where 43% urban Indians, in comparison to 48% (IPQ 3.0 Express) are saving for unforeseen medical expenses. With sporadic lockdowns/restrictions continuing in the country, savings and investments further increased from 53% (IPQ 3.0 Express) to 56% in IPQ 4.0, with basic and luxury expenses reducing to 29% and 15%.
• Safety becomes the ‘most valued currency’ with 88% preferring safe financial products Safeguarding their future against market uncertainties, IPQ 4.0 saw 88% respondents preferring investments in fixed deposits and guaranteed income life insurance plans. 11% have preferred to invest only in market-linked products such as mutual funds, shares, stocks and ULIP.
OUTLOOK TOWARDS TERM INSURANCE
• ‘Real value’ of life insurance strengthened - premium, value of cover and riders form key considerations during term plan purchase
71% respondents consider premium to be the most important parameter when purchasing term insurance followed by value of cover (68%) and riders or add-on benefits (52%). With the feeling of cover insufficiency increasing 3 times since IPQ 3.0 Express, a significant impact can be seen on term insurance ownership that has risen from 39% to 43% in IPQ 4.0
• South zone sees highest term insurance uptake; Tier 2 cities lag behind in ownership
South demonstrated the highest term insurance ownership at 45%, a 6%-point increase from IPQ 3.0. Ownership increase was also witnessed in metros and Tier 1 cities at 48% and 44% respectively, however only 35% term ownership was seen in Tier 2 cities which require more efforts to build term adoption
• Challenges hamper term ownership – high premiums, claims refund and hidden clauses in terms & conditions pose as barriers
The survey also raises key issues on term purchase where 25% urban Indians associate the plan with high premiums, 21% feel the policy has hidden terms and conditions and 21% attribute to challenges in receiving refund in case of claim settlement. The insights highlight the need for better awareness, education on term plan and its benefits
• Agent and online are key channels for purchase, human connect is still the preferred mode of communication for future ownership
41% urban Indians purchase term plans through the insurance agent, while 35% make their purchase online, highlighting the importance of both ‘DIY’ and agent support for consumers. 78% respondents will prefer communicating with a customer service representative when buying term plan in the future, thereby reemphasizing the ‘human connect’ in financial services
MILLENIALS & NON MILLENIALS
• Awareness for life insurance products among millennials and non-millennials was at par with 69. Realizing the importance of protecting their near and dear ones in these unprecedented times, term insurance ownership amongst millennials increased from 38% to 43%
MEN & WOMEN
• The survey witnessed a marked increase in the knowledge index for women, from 67 (IPQ 3.0 Express) to 70. While life insurance ownership stood at 78% for both set of respondents, men continue to take the lead over women in term insurance with 44% ownership.
SALARIED VS SELF-EMPLOYED
• Protection quotient of salaried individuals increased from 47 to 53 in IPQ 4.0, overtaking the self-employed segment which remained at 49 owing to the Covid-19 impact on business continuity. Term ownership for the salaried segment increased from 39% (IPQ 3.0 Express) to 47% in IPQ 4.0, whereas for self-employed the ownership remains constant at 41%.
Disclaimer:
The study is conducted in top 25 Urban metro, Tier 1 and Tier 2 cities; hence, its findings are representative of metro, Tier 1 and Tier 2 cities of Urban India only.
• Metro – Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Mumbai
• Tier 1 – Ludhiana, Jaipur, Lucknow, Patna, Bhubaneshwar, Vizag, Ahmedabad, Bhopal, Pune
• Tier 2 – Dehradun, Moradabad, Guwahati, Bokaro, Kolhapur, Jamnagar, Raipur, Ujjain, Hubli-Dharwad, Tiruchirappalli
• IPQ 3.0 Express vs IPQ 4.0 (digital versions) data comparison is amongst 25 markets only [6 metros, 9 Tier 1 and 10 Tier 2]
• The minimum sample to conclude any findings of the study is 270 with an error margin of +-5.964%.
*About India Protection Quotient
Instituted in 2019, India Protection Quotient is an annual property by Max Life Insurance in association with Kantar aimed to understand the pulse of the Indian consumers in the financial protection space. Launched with the underlying objective to increase penetration of Term insurance as the most fundamental and economical form of life insurance, the survey aims to reveal the state of Urban Indians with regards to current financial security levels, changing savings & investment patterns, key anxieties & triggers of financial protection in a contemporary world.
India Protection Quotient is a proprietary tool developed by Max Life in partnership with Kantar to gauges the degree to which Indians feel protected from future uncertainties on a scale of 0 to 100. It is based on the attitudes, mental preparedness around future uncertainties, awareness, and ownership of life insurance product categories (Term, endowment and ULIP).
About Max Life Insurance (www.maxlifeinsurance.com)
Max Life Insurance Company Limited is a Joint Venture between Max Financial Services Limited and Axis Bank Limited. Max Financial Services Ltd. is a part of the Max Group, an Indian multi-business corporation.
Max Life offers comprehensive protection and long-term savings life insurance solutions, through its multi-channel distribution including agency and third-party distribution partners. Max Life has built its operations over almost two decades through a need-based sales process, a customer-centric approach to engagement and service delivery and trained human capital.
As per public disclosures and annual audited financials for FY20-21, Max Life has achieved a gross written premium of INR 19,018 crore. As of 31st March 2021, the Company had INR 90,407 crore of assets under management (AUM) and a Sum Assured in Force of INR 1,087,987 crore.
For more information, please visit the Company's website at www.maxlifeinsurance.com
About Kantar:
Kantar is the world’s leading evidence-based insights and consulting company. We have a complete, unique, and rounded understanding of how people think, feel and act; globally and locally in over 90 markets. By combining the deep expertise of our people, our data resources and benchmarks, our innovative analytics and technology, we help our clients understand people and inspire growth.
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