Urban India leads in Life Insurance, South India most financially protected region, survey reveals

Max Life Insurance has revealed its flagship survey, the India Protection Quotient Survey or IPQ which was conducted in collaboration with KANTAR. This time IPQ covered diverse demographics including Gen Z, women, and Millennials, and promoted the theme of protecting all. According to the survey, urban India has shown remarkable progress in financial preparedness, with three in four urban Indians owning a life insurance product. The protection index has increased from 43 in IPQ 5 to 45 in IPQ 6 reflecting positive trends in protection awareness and acceptance in the country. 

IPQ 6 revealed key demographic insights, showing that Millennials slightly lag behind older generations in financial preparedness, with Millennials and non-millennials scoring 45 and 46, respectively. Meanwhile, Gen Z is the least economically secure age group, with a security index of 42 points, largely due to low insurance coverage. The success of reducing the gender gap in economic security for working women is a major achievement. The protection index of a working woman rose to 47 points, which is the same as her male colleagues. It is worth noting that currently 8 out of 10 working women invest in life insurance.

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Other highlights of the survey are: 

- The knowledge index has increased from 57 to 61 and the number of life insurance owners increased from 73 to 75  

- Over five years, the India Protection Index recorded a significant 10-point increase from 35 at IPQ 1 to 45 at IPQ 6 confirming Urban India's continued efforts towards building financial resilience 

- The latest findings also indicate a change in the country's financial situation. Despite a slight increase from 63% to 65% the economic security of urban Indians has yet to fully recover to pre-pandemic levels

- Based on last year's observations, this year's metropolis is close to the 50-point standard, with a protection index of 49 points.

- In contrast, life insurance ownership and acceptance in tier 2 cities remains stagnant, with IPQ lagging by 36 points

- Consistent with previous findings, South India maintained its position as the most financially protected region with a protection index of 49 points.

- This was followed by West Indies, whose financial preparedness improved significantly from 42 points to 46 points  

- In terms of economic security, the northern and eastern zones lagged by 41 and 40 points, respectively

Prashant Tripathy, CEO and Managing Director, of Max Life Insurance, said, “By incorporating new cohorts each year, IPQ has become stronger, bigger, and more comprehensive. Today, we are witnessing a remarkable shift in the economic mindset of this diverse group. Three out of Fours people, who live in urban India, have life insurance. This opens opportunities for us in the field of digital transformation, developing customized products ensuring further penetration of insurance in the country, and realizing the vision of 'Insurance for all by 2047.”

When Outlook Money asked him about the lack of insurance penetration in tier-3 cities the geographic disparity between South and East and the possibility of customized products for lagging regions, Tripathy said, “Things have moved in last 4-5 years concerning customization including types of policies, size of policy and ticket sizes but I think the big deterrent that comes in the way of going to Tier 3, Tier 4 or villages is more to do with distribution than product. How do you reach out to those places in a cost-effective, economical manner? This is something that we need to crack and I think the Bima Vahak perhaps is an answer to that. We will create and it will be the women workforce which will take it to all the villages.”