Insurance buyers ignore home, healthcare needs, focus on family’s financial security | Business News
Over 70 per cent of Indians are setting aside immediate requirements like purchasing a home, buying a vehicle, healthcare needs or going on a vacation and instead prioritise their family’s financial security, says a survey.
While savings and securing the family’s future are considered as the primary reasons for opting for life insurance policies, this focus on family often comes at the expense of other immediate financial goals. With 60 per cent of individuals zeroing in on just one priority — family financial security — they are overlooking the importance of savings and meeting immediate requirements, says the survey conducted by Canara HSBC Life Insurance.
Returns from life insurance policies are much lower when compared to mutual funds where returns can be as high as around 15 per cent per annum. Mutual fund investments, especially monthly SIPs, are now increasingly becoming an important avenue for savings and higher returns. Returns from life insurance plans are normally around the bank FD rates or even less in most cases.
Delving deeper, the survey reveals that 64 per cent of individuals wished they had begun their term insurance journey sooner. “Despite 83 per cent acknowledging the importance of term plans, a mere 11 per cent take the time to review their coverage annually. This lack of regular assessment leaves only 25 per cent of Indians feeling confident that their policy will sufficiently cover unexpected expenses,” the survey says.
The story continues with retirement planning. “While 66 per cent of Indians start planning for retirement in their 30s, a staggering 74 per cent regret not starting earlier. This delay has left only 27 per cent feeling prepared for retirement, and just 24 per cent believe their maturity amount will fully meet their financial needs,” it says.
The narrative takes a moving turn when it comes to planning for their children’s future, the survey says. “Only 18 per cent of Indian parents feel fully prepared, and an equal percentage believe their policy’s maturity amount will be enough to secure their child’s future. The regret is palpable, with 71 per cent wishing they had started the policy sooner and 82 per cent of parents feeling unprepared for their child’s financial needs,” the survey says.
Rishi Mathur, Chief Distribution Officer – Alternate Channels and Chief Marketing Officer, Canara HSBC Life Insurance, said, “These findings emphasize the need for early and regular financial planning. We believe that with the right guidance and timely decisions, every individual can achieve their financial aspirations and secure a better future for themselves and their loved ones.”
The survey highlights the importance of timely financial planning and the necessity of regularly reviewing insurance coverage. “It’s a call to action for individuals to ensure that their future, and that of their families, is safeguarded with comprehensive protection and security,” the survey says,
The survey, encompassing 800 participants aged 20 to 50, was conducted in eight Tier 1 and Tier 2 cities.
There are 27 life insurance companies in the country which together mobilised Rs 377,960 crore as premium during the year ended March 2024. These insurers sold 2.92 crore policies during the year, according to data available from the Life Insurance Council.
On the other hand, gross premium underwritten by health insurers was Rs 109,006 crore during the year ended March 2024.
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