With the pandemic making people more aware of health insurance and life insurance products, a survey by Max Life Insurance Co. has revealed that 57 per cent of the salaried professionals in India felt that the cover offered under employer group term was sufficient.
According to the third edition of the Max Life India Protection Quotient 3.0 (“IPQ 3.0”)’ survey in partnership with KANTAR, group term owners — salaried professionals who own term life insurance offered by their employer — were found to be more financially secure than salaried non-group term owners. Also, the term insurance ownership among the self-employed went up during the pandemic.
With financial security levels at 69 per cent, group term life insurance owners were more secure even amidst the pandemic. Owning life insurance from their employers, 77 per cent group term owners felt secure about financially catering to their child’s education whereas 74 per cent were secure about fulfilling family’s basic needs and 71 per cent felt financially secure about their jobs/business.
As opposed to this, salaried non-GT owners showcased financial security levels at an average of 56 per cent and were less secure across various facets. Only 62 per cent felt secure about fulfilling family’s basic needs, 61 per cent felt secure about financially catering to child’s education, and 59 per cent were secure about their jobs/business. However, only 57 per cent group term life insurance cover owners feel life cover offered by employer group term is sufficient.
The survey also revealed that the salaried class outperformed the self-employed across protection, knowledge index, and security levels even as the latter displayed compelling progress. Both cohorts registered an increase in their overall protection levels – while protection index of salaried class increased from 37 in last year’s survey (IPQ 2.0) to 41 now, and that of self-employed rose from 35 to 39.
In the backdrop of COVID-19, group term life (GTL) insurance owners displayed a higher protection index of 49 as compared to salaried non GTL owners at 38. The degree to which GTL owners are aware about life insurance products or knowledge index stood at a very positive 69 points, whereas it remained relatively lower for salaried non GT owners at 56. Therefore, the former’s life insurance ownership levels stood at a higher 86 per cent for salaried GTL owners as compared to 68 per cent for salaried non-GT owners.
A significant 65 per cent of group term life cover owners admitted that the life insurance cover being offered by the employer was an important factor in deciding their employment with a company. About 56 per cent salaried group term life cover owners and 53 per cent salaried non GTL cover owners said that employers should offer life insurance advice to plan personal finances better.
Aalok Bhan, director and chief marketing officer, Max Life Insurance, explained that the pandemic and resultant risk to jobs and health “heightened employees’ financial vulnerabilities”. That is why, there was “an increased focus towards savings and investments that could help combat unforeseen circumstances along with ensuring comprehensive financial protection.” Employers need to help their staff “build long- term financial resilience over the course of their employment,” he suggested.
The survey also revealed a notable increase in financial protection levels of salaried and self-employed classes. Term insurance awareness of salaried class increased from 57 per cent last year (as per IPQ or insurance protection quotient of previous 2.0 survey) to 62 per cent this year, whereas term insurance awareness of self-employed went up from 51 per cent to 63 per cent. Consequently, term insurance ownership also increased from 26 per cent to 28 per cent for salaried respondents and from 24 per cent to 31 per cent for the self-employed. This is a very positive development, as it is the first time that the self-employed surpassed the salaried professionals in term insurance ownership.
The study covered the top 25 urban metro, tier 1 and tier 2 cities, and hence, its findings are representative of metro, Tier 1 and Tier 2 cities of urban India only.