Pune: Reinforcing its commitment towards ensuring greater financial protection for the country, Max Life Insurance Company Ltd. (“Max Life”/ “Company”) unveiled the findings of the third edition of its flagship survey ‘Max Life India Protection Quotient 3.0 (“IPQ 3.0”)’ in partnership with KANTAR. As per the survey, urban West India witnessed a positive movement of 4 points on the protection quotient scale from 34 (as per previous IPQ 2.0 survey) to 38 points (as per IPQ 3.0). However, it was found that in the backdrop of Covid-19, the region still continues to feel financially insecure when compared with North and South.
Conducted in the most uncertain and challenging times, Max Life IPQ 3.0 assesses the notable shifts in West India respondents’ attitudes from the beginning of the lockdown in March 2020, through the different phases of COVID-19, until announcement of viable COVID – 19 vaccines in December 2020, making this one of the most comprehensive financial studies carried out during COVID-19 situation.
The survey revealed that the degree to which urban West India is aware about life insurance products is highest among all other regions. The knowledge index moved up by a notable 10 points to 56 during the pandemic, from the earlier 46 (as per previous IPQ 2.0 survey). While West India’s life insurance ownership levels too increased from 63 per cent during previous survey to 68 per cent during IPQ 3.0, it lagged behind in comparison to East which ranked the highest with 76 per cent life insurance ownership, followed by South at 75 per cent.
In the backdrop of Covid-19, West India’s security levels also plummeted. The region grew anxious about financial security and preparedness in the last one year; financial anxieties related to fear of Covid-19 infection, security of family’s financial wellbeing in the absence of breadwinner, cost of treatment of Covid-19 infection and inadequacy of funds in case of critical illness in family emerged as top concerns for citizens of the region. Furthermore, the survey witnessed an increase in West India’s levels of term insurance awareness and ownership in the wake of the pandemic.
V. Viswanand, Deputy Managing Director, Max Life said: “The latest edition of our flagship survey ‘India Protection Quotient 3.0’ revealed that while issues surrounding financial preparedness were magnified during the pandemic, urban India including the West region, navigated the challenges proactively. While the pandemic has resulted in some positive outcomes pertinent to health, proactive financial planning and preparing for the future, there is still a long way to go. We’re certain the findings will help West India realize the importance of life insurance in safeguarding the future of loved ones in the post Covid-19 era and steadily inch towards comprehensive financial resilience in the long term.”
The following findings reveal insights that highlight urban West India’s shift across financial priorities and anxieties, compared from pre Covid-19 times:
In the backdrop of Covid-19, urban West India feels increasingly anxious; the region’s financial security levels lower than North and South
With anxiety level at 62 per cent, West India remained anxious in the backdrop of Covid-19, even if North and East were more anxious at 68 per cent and 66 per cent respectively. Anxieties pertaining to ‘someone in the family getting Covid-19 infection’ was topmost in the West region. ‘Financial security of family in case untimely death of breadwinner’ and ‘cost of Covid-19 infection treatment’ were the other anxieties for West India.
The survey further revealed that amidst total or partial job losses, reduced income levels and escalated medical expenses only 54 per cent West Indians felt financially secure on an average. While this is greater in comparison to East (45 per cent), it is notably lesser in comparison to South and North India where 65 per cent and 61 per cent respectively, feel financially secure on an average. Only 51 per cent West Indians felt secure about their jobs/business, whereas only 47 per cent felt secure about taking care of medical expenses involving high expenditure.
Urban West India prioritizes savings and investments; in wake of the pandemic region saved most for old age security and children’s future
IPQ 3.0 brought to light that in comparison to pre Covid-19 times, West India is prioritizing savings and investments over discretionary spending. Savings and investments jointly constituted 51 per cent of income for West Indian respondents, followed by basic expenses which made up 40 per cent and luxury expenses that made up 10 per cent. Over the last year, savings/ investment share of income saw an uplift of 7 per cent in the West. While this is a positive improvement, it is greater only to South which saw a 5 per cent increase in savings/investments but lesser in comparison to 10 per cent increase in East and 12 per cent increase in North.
Pandemic compelled the urban West Indian to be more proactive about financial planning; but life insurance purchase intentions still poor
With a sense of increasing worries and reducing security, IPQ 3.0 saw West Indians becoming more proactive about financial planning. An impressive 80 per cent West India respondents said they are proactive about financial planning now; this number was significantly higher than 48 per cent in South and 75 per cent respondents in North who are financially proactive. On the other hand however, life insurance purchase intention of 21 per cent was lower in West India, as compared to South (35 per cent) and North (28 per cent). Old age security/retirement was the key purchase trigger for life insurance in West India, followed by ‘safe investment option’ and ‘for untimely death of breadwinner’ as the next most instrumental triggers.
Urban West India’s term insurance awareness is highest; term ownership improves but lags in comparison to other regions
The survey also indicated that West India is increasingly waking up to the challenges of pandemic and realizing the need for greater financial protection. West India saw a sharp increase in Term Insurance awareness by 12 per cent, however penetration still remained low with only a 3 per cent increase in term ownership. West demonstrated highest term awareness at 64 per cent, followed by South at 59 per cent, North at 56 per cent and East at 57 per cent. Despite this, West India’s term insurance ownership of 25 per cent was lowest in comparison to other zones – South at 33 per cent, East at 27 per cent and at par with North at 25 per cent. The same indicates that term conversion is yet to see an uptake in West India.
Over half of urban West India’s term insurance owners feel term plan cover is insufficient; increasingly prioritizing sum assured as key purchase parameterOn the back of improved term awareness, 54 per cent of West India’s term insurance owners feel that their Term plan cover is insufficient to safeguard the future of their family. The survey also revealed increasing importance of cover or sum assured, as 75 per cent of West India respondents (highest across regions) now consider it to be an important product parameter when buying Term insurance, as opposed to 54 per cent in IPQ 2.0. At 80 per cent, premium still continues to be the most important parameter, but features like ‘flexibility/customization’ are fast gaining popularity in West India.
Despite growing term awareness, there still exist barriers across zones in term uptake
The survey discovered that despite increasing term awareness, perception of term insurance as a protection plan has scope for improvement in the West region. Only 72 per cent West India respondents believed that term insurance ensures family’s future security in case of untimely death of the breadwinner. In addition to that, 34 per cent non-term owners in West India weren’t aware of term plan affordability and cited ‘high premiums to be paid’ as the reason for not buying it. Moreover, at 55 per cent, only over a half of West Indian respondents were aware that term plan is cheaper online.
As a result, the West region still continues to prefer endowment plans over term insurance products.
The survey reflected that fewer number of people preferred term products over endowment products across zones. Focusing on savings over protection, respondents in West India showed a higher percentage of endowment insurance ownership of 31 per cent as compared to overall term insurance ownership at 25 per cent. Ownership of savings/endowment plans was highest in East at 38 per cent, followed by 33 per cent in South and 32 per cent in North. This hints that the approach to buying life insurance is still largely conventional and the financial future of loved ones is yet to take priority.
Urban West India prioritizes health and fitness, more inclined towards using health apps.
With pandemic having medical implications, IPQ 3.0 revealed that West Indians are increasingly prioritizing health and fitness. A notable 82 per cent respondents said that they actively look for products that will improve immunity and 82 per cent also pay attention to health and fitness regime. The consideration of health apps is also higher in the West Zone where 60 per cent said they’d be interested in using an app that enables discounts on premiums in response to positive health and wellness patterns. In comparison to this, consideration of a health app stood at a lower 58 per cent in South and 50 per cent in East.
Critical illness riders yet to see wide uptake in urban West IndiaOn the back of heightened medical emergencies, the survey revealed an increase in adoption of critical illness riders in West India. While 24 per cent term plan owners, as opposed to earlier 15 per cent (IPQ 2.0), purchased critical illness riders with their term insurance, this number was only higher to South India (21 per cent). In comparison to West India, a greater 46 per cent term owners in North and 27 per cent in East purchased critical illness riders with their term plans.