The penetration of both life and health insurance is clearly on the rise, but the amount of cover may not be enough, shows the Outlook-Toluna Independence Day Youth Survey
The Covid pandemic seems to have drilled it into Indians, at least the younger population, that insurance is important. Though it seems that a greater number of people have opted for insurance, the coverage doesn’t seem to be adequate, whether it’s health insurance or life insurance, according to the Outlook-Toluna Independence Day Youth Survey.
While 70 per cent of those having health insurance have a sum insured of less than Rs 5 lakh, close to 50 per cent respondents with a life insurance policy have a sum assured equal to or less than their annual income.
According to the Survey, as many as 77 per cent respondents have health insurance.
The survey was conducted across India among around 1,800 people in the age group of 18-35. Among the group surveyed, the incidence of health insurance was higher among the older age group.
While most respondents either had personal health insurance or the one provided by their employers, few had both.
While north India shows higher number of people taking personal health insurance, most people in south India depend more on employer-provided policies.
Around 55 per cent of the respondents from 242 people surveyed within the age group of 22-25 years, said that they have a health insurance which is provided by the employer, according to the survey. Around 55 per cent respondents from north India said that they have a health insurance which they bought for themselves, according to the survey. About 70 per cent of the respondents have a sum assured less than Rs 5 lakh.
Also, the average sum assured is slightly less in south India. Around 40 per cent people out of 231; 39 per cent people out of 139 in the age group of 18-21 years; and 39 per cent people out of 242 in between 22-25 years, have a sum assured less than Rs 2 lakh.
Worryingly, the survey revealed that people are underinsured. Only eight per cent of respondents have sum assured higher than eight times of their annual income. Experts suggest that one should have a life cover that is at least 10 times the annual income, as a thumb rule. Respondents from south India have the least sum assured compared to annual income, showed the survey.
However, term insurance, the simplest and cheapest form of life insurance, is the most acquired among respondents, especially those in the age group of 18-21 years.
As far as the number of policies is concerned, respondents indicated a preference for keeping more than one life policy in general. While 48 per cent of the respondents have two-three insurance policies, 45 per cent have only one policy.
South India is inclined slightly towards keeping a single policy, with only 7 per cent of the respondents having more than three policies.