Life insurance is owned by 60% of policyholders choosing whole life insurance/endowment plans, 30% opting for term life insurance
National Insurance Awareness Day: A new survey has revealed that 30% of respondents in Tier 2 and Tier 3 cities currently own insurance policies. Among the various insurance types, Motor Insurance emerges most common, with ownership of 60% for two-wheeler, 35% for two-wheeler insurance, and 5% for commercial vehicle insurance.
Read More: Senior Citizen Long-Term Fixed Deposit Interest Rate Hike: 12 Banks on Nifty Bank Index Compared
The survey said 40% of those surveyed have individual health insurance, 50% opting for family floater health insurance, and 10% owning critical illness insurance. Life insurance is owned by 60% of policyholders choosing whole life insurance/endowment plans, 30% opting for term life insurance, and 10% selecting unit-linked insurance plans (ULIPs).
In its annual survey, BajajCapital Insurance Broking Ltd. surveyed 4000 individuals in Tier 2 and Tier 3 cities in a span of 6 months, aiming to understand insurance preferences, perceptions, and knowledge among residents. The research report encompasses an analysis of insurance buying behaviour across different demographics.
Other insurance types, such as property insurance, travel insurance, business insurance, and agriculture/crop insurance, also see varying and very minimal levels of ownership. The survey findings reveal that only 10% of respondents currently own property insurance, while travel insurance and business insurance have ownership rates of 5% each.
Additionally, agriculture/crop insurance has the lowest ownership rate, with just 2% of respondents having such coverage.
Factors affecting insurance purchase
Factors influencing insurance purchase decisions are of paramount importance. The survey finds that affordability of premiums plays a significant role, with 50% of respondents considering it very influential. Awareness and understanding of insurance benefits is also a crucial factor, with 30% citing it as very influential.
Recommendations from family or friends have a strong impact on 30% of respondents, while government schemes or initiatives influence 25% significantly. Accessibility of insurance products through technology is highly influential for 30% of respondents.
Trust in insurance products is another aspect that the survey addresses. The findings indicate that 65% of males generally exhibit higher levels of trust compared to 40% of females across various aspects, including the perception of the claim settlement process and the reputation/credibility of insurance companies.
Trust levels also vary across different age groups, with 70% of individuals aged 45 and above showing higher levels of trust, while 60% of individuals aged 25 to 40 exhibit some confidence in insurance products. This age-wise breakdown highlights the influence of age on trust levels in insurance.
Read More: Irdai to roll out first phase of pilot for ‘Risk Based Supervision’ from July
Insurance buying modes
In terms of preferred modes of insurance purchase, online platforms such as websites and mobile apps emerge as the most favoured option, with 50% of respondents preferring this mode. Intermediaries such as brokers & agents are favoured by 40% of respondents, while government offices or authorised centres see limited preference at 10%.
The survey also assesses awareness and utilisation of government insurance schemes. It reveals that awareness levels are higher among males compared to females. However, only 35% of respondents actively utilise government insurance schemes, indicating a potential area for improvement in promoting awareness and utilisation among the consumers.
Sanjiv Bajaj, joint chairman and managing director, BajajCapital, said, “We are thrilled to present the findings of our comprehensive survey on Insurance Awareness Day. The insights garnered from this survey offer valuable perspectives on the insurance landscape in Tier 2 and Tier 3 cities. As an organisation committed to financial inclusion, we believe these findings will aid insurance companies, intermediaries, and policymakers in designing targeted strategies to enhance insurance penetration and financial security.”
