While most Indians are underinsured, a mere 25% of Indians who have purchased an insurance policy are confident that their insurance policy will be adequate to cover sudden expenses, a survey conducted by Canara HSBC Life Insurance survey has revealed. The sample of the survey titled “Perfect Plan Ka Partner” comprised 800 participants, who were between 20 and 50 years of age and hailed from a total of 8 Tier 1 and Tier 2 cities.
As much as 64% of those who responded told the surveyors that they regretted not buying insurance earlier in life.
Regular assessment by 11%
The survey also found that 83% of those interviewed said that they certainly appreciated the significance of term insurance policies but only a paltry 11% undertake the time and effort to assess their coverage every year.
The survey also a huge 70% of the respondents regularly sacrifice their wants and desires to secure the financial security of their families. The sacrifices typically include going on vacations and buying a dwelling unit.
Regrets around retirement planning
Retirement planning is another area where regrets about starting out late was evident. The survey found that 66% of the respondents began planning for life after retirement while they in their 30s. However, a huge 74% admitted that they should have begun the process earlier in life that would have allowed them accumulation of bigger capital. As a result, a small 27% of the respondents felt prepared for retirement. An even smaller share – just about 24% — thought that they would be able to accumulate a sufficient corpus to look after their needs.
How savings are allocated
Disaggregating investment across asset classes, the survey found that among policyholders 26% of the savings were in banks and cash in hand in metro cities (29% in Tier 1 and 30% in Tier 2 cities); 20% in safe assets in metro cities (27% in Tier 1 and 25% in Tier 2 cities); 10% in risky assets in metro cities (4% in Tier 1 and 6% in Tier 2 cities); 23% in physical assets in metro cities (18% in Tier 1 and 19% in Tier 2 cities) and 21% in life insurance in metro cities (22% in Tier 1 and 20% in Tier 2 cities).
The insurance industry has a long way to go in India. While the global average of insurance penetration is 3.4%, that in India is at 2.6%. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
