New Delhi: Reinforcing its commitment towards ensuring greater financial protection for the country, Max Life Insurance Company Ltd. (“Max Life”/ “Company”) today unveiled the findings of the third edition of its flagship survey ‘Max Life India Protection Quotient 3.0 (“IPQ 3.0”)’ in partnership with KANTAR. As per the survey, Urban India witnessed a positive movement of 4 points on the Protection Quotient scale from 35 (as per IPQ 2.0) to 39 (as per IPQ 3.0). However, it was found that in the backdrop of COVID-19, India continues to feel financially insecure.
Conducted in the most uncertain and challenging times, Max Life IPQ 3.0 assesses the notable shifts in attitude of Urban Indians from the beginning of the lockdown in March 2020, through the different phases of COVID-19, until announcement of viable COVID-19 vaccine in December 2020. Around 4,357 respondents were surveyed via face-to-face interviews with adequate safety measures across 25 cities comprising 6 metros, 9 Tier I and 10 Tier II cities, making this one of the most comprehensive financial studies carried out during COVID-19 situation.
Urban India has grown more anxious about financial security and preparedness in the last one year, the survey noted, and there is a significant shift towards increasing savings and investments. Financial anxieties related to COVID-19, and ability of current earnings to cover expenses have emerged as top concerns for Urban Indians.
The survey revealed that the degree to which Indians are aware about life insurance products or the Knowledge Index moved up by 9 points to 55 and Life Insurance Ownership levels increased by 500 bps from IPQ 2.0 to 71 per cent. The degree to which Indians feel financially secure and prepared or the Security Level dipped by 300 bps to 57 per cent amidst uncertain times. Notably, the survey shows a significant growth of Knowledge Index across all cities, age and gender, highlighting the responsible outlook of Urban India amidst uncertain times.
In the wake of the pandemic, the survey witnessed an increase in India’s levels of Term insurance awareness and Term insurance ownership. Now, 28 per cent of urban Indians own Term products, notably higher than the earlier 24 per cent as per IPQ 2.0.
Prashant Tripathy, Managing Director and CEO, Max Life Insurance said, “The idea behind India Protection Quotient, when launched three years ago, was to make Indians more aware about the benefits of financial protection in the contemporary world. Over the course of time, IPQ has come to be recognized as a valuable property, instrumental in helping consumers and the life insurance sector at large to understand the financial preparedness of Urban Indians. And, while the survey has observed a positive trend in Urban India’s approach to financial protection over the last three editions, there’s still a long way to go.”
He further added, “Launched in the backdrop of an unprecedented year, IPQ 3.0 survey reveals that while issues surrounding financial preparedness were magnified during the challenging COVID-19 times, there are long-term lessons to be learned when it comes to addressing and acknowledging financial protection. Slowly but gradually, we are seeing Urban India move towards proactive financial planning that can avert anxieties and help build resilience.”
Soumya Mohanty, Managing Director and CCO, Kantar Insights, South Asia remarked on the findings of the survey, “IPQ as a flagship survey has grown to become a strong marker for the life insurance sector in India. Since its first edition in 2019, it has helped the sector sharpen their focus and product offerings. In the wake of COVID-19 pandemic, IPQ 3.0 presents us with useful insights around people’s attitudes towards savings, investments, and the overall idea of financial protection in uncertain times. We’re happy to be associating with Max Life Insurance as it strives to make a difference in helping Indians understand the importance of life insurance and deepen its penetration throughout the country in the year following COVID-19.”
The following findings reveal insights that highlight India’s shift across financial priorities and anxieties, compared from pre-COVID times:
ZONAL AND CITY-WISE INSIGHTS
- Amongst zones, South India continues to be most protected with Protection Quotient at 41
- South India continued to outperform other regions, followed by North with IPQ of 39, West with IPQ of 38 and East with IPQ of 36.
- While East India’s Protection Quotient and Knowledge Index lagged in comparison to other zones, it led in Life Insurance Ownership with 76 per cent.
- Security levels remained highest in the South at 65 per cent, followed by North at 61 per cent, West at 54 per cent and East at 45 per cent.
- Urban India’s metros continue to be most protected; Delhi leads with Protection Quotient at 50 amongst metros.
- With a Protection Quotient of 43, metros continued to feel most financially protected during COVID-19.
- This was followed by Tier 1 cities which demonstrated a Protection Quotient of 38 and Tier 2 cities at 33.
- Tier 1 cities witnessed a sharp rise in life insurance awareness, from 46 to 54, as well as ownership that now stands at 66 per cent compared to 62 per cent previously.
It has been noted that security levels have dropped all across in comparison to IPQ 2.0, although metros continued to have a higher security level of 62% in comparison to Tier 1 cities at 61 per cent and Tier 2 cities at 46 per cent.
Additionally, most major cities marked an increase in Protection Quotient – Delhi led with a Protection Quotient of 50 raking a 3-point increase in comparison to IPQ 2.0. Hyderabad was the only metro city to witness a decline from last year as Protection Quotient dropped by a point to 45. The survey also reported an increase in Knowledge Index and a dip in security levels across all cities.
URBAN INDIA’S ANXIETIES AND OUTLOOK TOWARDS FINANCIAL PROTECTION
Urban India increases savings and investments, basic and luxury expenses go down significantly
- IPQ 3.0 brought to light that in comparison to pre COVID-19 times in IPQ 2.0, Urban Indians are prioritizing savings and investments over discretionary spending.
- Savings and investments increased from 41 per cent (IPQ 2.0) to 50%, whereas basic expenses decreased from 44% (IPQ 2.0) to 41 per cent.
- Savings objectives also saw some change during the pandemic.
- While only 35 per cent saved for the death of breadwinner, a higher 41 per cent saved for it now and 62 per cent saved for old age security, as compared to 57 per cent earlier.
- Anxiety levels up by 6 per cent; fear of infection, cost of COVID-19 treatment, untimely death of breadwinner; topmost anxieties
The survey revealed that Urban India’s anxiety levels climbed up from 55 per cent to 61 per cent this year.
- While 64 per cent respondents felt secure about taking care of regular medical expenses as per IPQ 2.0, only 59 per cent felt secure as per IPQ 3.0.
- Urban Indians were 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.
- With a sense of increasing worries and reducing security, IPQ 3.0 saw Urban Indians becoming more proactive about financial planning and overall health and fitness.
- 69 per cent respondents said that they’re proactive about financial planning and they believe in saving more than spending respectively.
AWARENESS OF TERM INSURANCE
COVID-19 drives Indians to purchase Term Insurance plans; awareness of Term Insurance highest in Tier 1 cities.
- Urban India saw a sharp increase in Term Insurance awareness by 7 per cent, however penetration still remained low at 28 per cent.
- While 42 per cent respondents said they’d purchase Term insurance to ‘protect family in case of breadwinner’s death’, 33 per cent respondents said that they would purchase Term insurance plans because ‘death is a reality one needs to be prepared for’.
- The survey also observed that awareness of Tier 1 cities of term insurance stands at 65 per cent, highest across India.
- Amongst zones, South India has best Term insurance ownership at 33 per cent. The sharpest increase of 12 per cent in Term awareness was seen in North and West India.
Realization of Critical Illness, death occurrence in family sees significant increase in COVID times
- 25 per cent respondents, as opposed to earlier 19 per cent respondents (IPQ 2.0), thought about critical illness preying on them whereas 30 per cent had the thought that it could prey on their family members.
- In comparison to 18% as per IPQ 2.0, a higher 25% had the realization of death and thought about the financial stability of the family.
MILLENNIALS & NON MILLENNIALS
- Millennials warm up to life insurance during COVID-19 with a 6 per cent jump in ownership
- In the backdrop of COVID-19, millennials demonstrated a 6 per cent jump in Life Insurance Ownership – from earlier IPQ 2.0 64 per cent to now 70 per cent.
- While non-millennials lead with 73 per cent Life Insurance Ownership, Knowledge Index, Protection Index and overall Security Levels of both cohorts are almost at par in the backdrop of COVID-19.
- 57 per cent millennials as opposed to 58 per cent non-millennials feel financially secure under current circumstances, indicating a more or less similar impact of the pandemic.
WOMEN & MEN
- Working women at par with men in Protection Index; attitudinally feels more secure during COVID-19
- While the protection quotient for men was at 40 point, working women demonstrated a strong IPQ of 39 in backdrop of the pandemic.
- Despite 69 per cent working women owning life insurance as opposed to 73 per cent men, the former was found to be more attitudinally secure during COVID-19.
- While 59 per cent working women were financially secure, only 57 per cent men were found to be secure.
- Furthermore, working women’s Term insurance awareness was also at a higher 64 point as compared to men who displayed lesser Term insurance awareness at 62 points.
THE DIGITALLY SAVVY URBAN INDIAN
- Even with a vaccine in sight, ‘Digitally Savvy Urban Indian’ continues to feel attitudinally less secure at 51 per cent
- A relatively high awareness and better ownership of life insurance products led the digitally savvy Urban India to demonstrate an IPQ of 47 (a point increase from IPQ Express).
- Knowledge Index at 67 (increased by a point) and Life Insurance Ownership increased by 3 per cent to 78 per cent, but respondents felt the same with regards to attitudinal security at 51 per cent.
- On the other hand, Term insurance awareness of digitally savvy respondents improved by 3 per cent to 80 per cent and subsequently Term insurance ownership also improved by 3 per cent to 39 per cent.
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