The COVID-19 pandemic has made urban India feel more financially insecure, the Max Life India Protection Quotient 3.0 (IPQ 3.0) survey revealed.
According to the survey, the anxiety levels of urban Indians climbed from 55 to 61 per cent in 2020. In the IPQ 2.0, 64 per cent of respondents felt secure about taking care of regular medical expenses, the number now stood at 59 per cent.
The respondent group was found to be most anxious about the possibility of ‘someone in the family getting infected with COVID-19’. 'Sustaining lifestyle and expenses with current earnings’, ‘financial security in case of breadwinner’s death’ and ‘cost of COVID-19 treatment’ were the other three topmost anxieties.
The survey also brought to notice that urban Indians are now prioritising savings and investments as compared to the pre-coronavirus period. Savings and investments increased from 41 per cent (IPQ 2.0) to 50, whereas basic expenses decreased from 44 per cent (IPQ 2.0) to 41, and luxury expenses decreased from 14 (IPQ 2.0) to nine per cent.
The pandemic has also made urban Indians more proactive towards financial planning and overall health and fitness. 69 per cent of respondents said that they’re proactive about financial planning and they believe in saving more than spending respectively.
Along with this, the survey highlighted that India's protection quotient (IPQ) moved up four points from 35 to 39. The protection quotient is the degree to which Indians feel protected from future uncertainties, on a scale of 0 to 100. It is based on the attitudes, mental preparedness around future uncertainties, awareness, and ownership of life insurance product categories (Term, endowment, and ULIP).
Among all the zones in India, the south emerged as the most protected with a protection quotient of 41, followed by north with IPQ of 39, west with IPQ of 38, and east with IPQ of 36.
Another major finding was the increase in ownership of term insurance products. According to the survey, 28 per cent of urban Indians own term products, the number was 24 per cent for IPQ 2.0.
The survey was conducted by Max Life Insurance Company Limited in partnership with KANTAR among 4,357 respondents via face-to-face interviews across six metros, nine Tier I and 10 Tier-II cities. It was conducted to assess the notable shifts in attitude of urban Indians from the beginning of the lockdown in March 2020 until the announcement of a viable COVID–19 vaccine in December 2020.