Hela March 9, 2019

life-insurance3-gettyTerm insurance is by far the best form of financial protection. Yet, very few people are aware of it and even fewer buy it, resulting in grossly low levels of protection in Indian cities, says a study by Max Life Insurance and Kantar IMRB.

Here are some key takeaways of the survey conducted last month.

India Protection Quotient stands at a low of 35
The India Protection Quotient is the degree to which an individual feels protected on a scale of 0 to 100. It measures, among other things, awareness and ownership of life insurance, level of preparedness and preference for term plans.

Protection levels in urban India are low


Few know of term insurance, even fewer buy it


Bengaluru and Pune, which have a high % of millennials and educated professionals, were among the lowest scorers.

How various demographic segments look at term insurance
Millennials don’t care too much about protection


Age also plays a role in awareness and purchase of term insurance
Awareness and ownership higher for older people


Reasons for not buying term plans
80% of respondents don’t think they will die suddenly


Numbers will not add up to 100 because of multiple responses

And what makes people buy
Actual result or purchase by peers have biggest impact


10% of term plan buyers take a critical illness rider. nine out of 10 buyers are not fully covered.

Expected sources of support in case of critical illness
Don’t count on anyone other than your immediate family

  • 65% Immediate family
  • 31% Extended family
  • 21% No one
  • 14% Friends
  • 3% Employer

How much does a term cover of Rs 1 crore cost?

Age of buyer Tenure (In Years) Monthly Premium Annual Premium
25 years 40 675 7,670
30 years 35 810 9,204
35 years 30 1,018 11,564
40 years 25 1,319 14,986
45 years 20 1,745 19,824
50 years 15 2,316 26,314
55 years 10 3,063 34,810

*Premium rates of Max Online Term Plan for male non-smokers; premium inclusive of GST
Source: The India Protection Quotient 2019 study had 4,566 respondents from five metros and nine Tier I cities.