In numerous Indian households, the absence of adequate insurance coverage is an undeniable reality. Moreover, misconceptions about insurance and its effectiveness have deterred many individuals from considering its importance.
This “Life Insurance Awareness Month,” SBI Life Insurance has redirected the focus of its investors towards life insurance by unveiling the third edition of its comprehensive consumer study titled “Financial Immunity Study (F.I.) 3.0: Demystifying the Consumer’s Illusions.”
This study delves into the thought processes of Indian consumers, debunking myths about financial readiness, and exposing prevailing illusions that impede their journey towards genuine financial security. The study, conducted in collaboration with Deloitte, gathered findings through a survey of 5,000 respondents across 41 cities, covering the entire landscape of India.
The Reality Of Illusions
In a world reshaped by unforeseen challenges, the study mirrors a stark reality.
Indian consumers’ perceptions of financial preparedness are often obscured by illusions that could have dire consequences for them or their family members, thus leaving them financially vulnerable amid life’s uncertainties. While a significant 68 per cent of consumers believe they possess adequate insurance coverage, the harsh truth reveals that only a meagre six per cent of insured consumers are genuinely well-insured.
However, there is still reason for hope, as a promising 71 per cent of uninsured respondents recognise insurance as an absolute necessity for achieving ‘financial immunity’. Further, an overwhelming 83 per cent of insured individuals acknowledge the critical role of insurance in attaining financial resilience, as the study revealed.
Empowering Financial Immunity: Insights From The Study
Mahesh Kumar Sharma, managing director and CEO, SBI Life Insurance, said that through their latest initiative conducted in collaboration with Deloitte, they aim to demystify the illusions that obscure Indian consumers’ understanding of financial preparedness.
“Our goal is to empower individuals with knowledge, tools, and solutions that strengthen their financial foundations and ensure peace of mind in an uncertain world,” said Sharma.
Sharma added: “The findings underscore a critical need for a paradigm shift in how we perceive financial preparedness. It’s a matter of great concern that 80 per cent of consumers acknowledge insurance’s pivotal role in financial security, yet a staggering 94 per cent remain inadequately covered. This stark contrast between perception and reality drives the urgency of our mission. The study is more than just a report; it’s a call to action. We believe that every individual deserves the opportunity to build resilience against life’s uncertainties. Together, we can bridge the gap between perception and reality and truly empower individuals to achieve ‘Financial Immunity’.”
Dispelling Myths: Overcoming Illusions For A Financially Immune Future
The report’s highlight is the revelation of five pervasive consumer illusions that have hindered true financial preparedness. Correcting these myths can light the way to a financially secure future.
1] Merely Owning An Insurance Policy Guarantees Adequate Protection: While 68 per cent of consumers believe they have sufficient insurance coverage, only six per cent are genuinely well-insured. In reality, 94 per cent of consumers are either underinsured or uninsured.
2] Investments In Financial Instruments Provide Better Security Than Insurance: In truth, 80 per cent of consumers believe insurance is an absolute necessity for financial immunity, and 71 per cent of uninsured consumers view insurance as a critical lever in building financial immunity.
3] Insurance Policies Can Be Forfeited In Event Of Fund Shortage: Approximately 50 per cent of consumers consider surrendering policies prematurely, but insurance policies can serve as collateral for loans in times of need.
4] Owning Assets And Savings Is A Replacement For Life Insurance: In reality, 62 per cent of consumers lack confidence in their savings for the future. While traditional investments like fixed deposits and savings are favoured by Indian households, they also offer different advantages compared to insurance policies.
5] Employer-Provided Insurance Cover Is Sufficient: In reality, 96 per cent of employees solely covered by their employer-provided insurance are underinsured, as employer-provided policies may not always suffice, depending on individuals’ growing needs.