While securing their family against future financial challenges remains the main driver for 83% of the respondents in a latest study, more than 70% of life insurance consumers believe that they could secure their child’s education and medical emergencies expenses with adequate insurance coverage.
These are the findings of Future Generali India Life Insurance Co. Ltd., based on a study on the perceptions and preferences surrounding life insurance. The report highlighted key hurdles consumers face when purchasing life insurance or enhancing their coverage, especially the rising discontent amongst Gen-Z policyholders who remain unenthused by the lack of transparency, trust and commitment displayed by life insurers during the policy period.
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According to the study, lack of funds (44%) and lack of knowledge/understanding (40%) are the top barriers to life insurance. 48% of males stated insufficient funds compared to females. While, 18% of respondents believe that premiums are very expensive.
The company said that the study is based on responses collected from 1300 respondents belonging to different age groups, income groups, genders, and key markets.
Across age groups, respondents believe they can’t expect ‘better returns’ from life insurance products.
Also, despite 89% of the participants viewing life insurance as an instrument to achieve future financial security, more than 50% believe it to be an appealing savings product that also offers superlative tax benefits. 61% of the population in Tier 1 & 75% of the population in Tier 2 plan to invest in Life Insurance.
More than a third (39%) of those in the 45+ yrs age group have opted for life insurance to secure lump sum or regular pay-outs, indicating changing purchasing preferences as consumers age.
Across the younger respondents though, aspects such as income protection and the potential to generate better returns than traditional saving instruments remain the top drivers to purchase life insurance products.
Gen-Z population has poorer perceptions of life insurance companies’ trustworthiness, transparency, and commitment.
Around 70% of participants feel the need to increase their life insurance coverage, particularly males and those aged 27-34.
Bruce de Broize, MD and CEO, Future Generali India Insurance, said, “For a country that is pegged to become the third largest economy by 2027-28, improving life insurance penetration can act as an important driver for overall economic development.”
To bring India on par with the global average, addressing the top barriers preventing the country’s citizens from securing themselves with life insurance is pertinent. Unsurprisingly, 44% of our survey’s respondents confessed to not having sufficient funds to invest, while nearly 40% cited their lack of knowledge about the benefits of life insurance and the increasing product complexity as the top reasons for not investing in a suitable life insurance cover,” Bruce de Broize added.
The study emphasised the growing popularity of online channels like websites and mobile applications amongst the intended target group, mainly due to the increased transparency and benefits on offer.
Moreover, with ~70% of existing life insurance purchasers inclined to increase their coverage, insurers need to improve their customer outreach initiatives and capitalise on the immense opportunities presented by the country’s booming working population.
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