Nearly six out of 10 participants in a recent survey say that they buy term life insurance for 'financial protection', and around 38% of them buy the cover for a combination of reasons that include financially securing themselves, their families and for tax savings.
Most of the participants are unaware of how to choose the right life cover for themselves. The responses were fragmented, as one third of those surveyed believe that the sum assured should be in the range of 10-20 times of their annual income, according to the poll of 5,600 insurance buyers by online insurance aggregator Policybazaar. The survey findings were released in conjunction with National Insurance Awareness Day, which fell on 28 June.
The overall results show India still buys insurance for 'tax-saving' and 'investment', however, the country is slowly recognising that insurance means 'protection'.
Nearly five out of 10 participants are aware that term life insurance results in no payment if the individual survives the term, even as 30% show ignorance whether they would receive a payout.
The survey findings also indicate that four out of 10 respondents bought a term cover, which provides them financial protection until they retire or are completely free of their financial obligations. Furthermore, nearly one third of consumers purchase term insurance covering their working years.
Health insurance
As for health insurance, 98% of respondents say they purchase health cover for financial protection against medical expenses. 24% give additional weightage to a combination of factors that include tax saving, personal events such as marriage, and birth of child etc.
45% are convinced that their employer provide medical cover which does not adequately cover their health needs, even as a large percentage continues to be unsure or thinks that it's enough to protect them during their lifetime.
Nearly 40% of those surveyed consider the claim settlement ratio as the biggest pull for them in choosing a health insurer, followed by the network of hospitals, brand name, and recommendations by family and friends.