Life insurance popular choice among women: IndiaFirst Life Insurance-ASSOCHAM

The key finding of the IndiaFirst Life-ASSOCHAM ‘Women Oriented Survey’ reveals that women start saving young and have a clear understanding of their needs.

The survey also indicates while there is a change in their monetary requirement with changing roles, women not only seeks financial security for themselves but their family too.

The financial choices that are least preferred by respondents are bonds (19%), stocks and equities (21%) and pension fund account (36%) in that order, reveals the paper.

Kamaljeet  Sehrawat, South Delhi Mayor,  Ms. Richa Anirudh-Talk Show Host, Anchor, Journalist, Zindagi Live with Richa Host, Dr. Deepali Bhardwaj-Director & CEO Centre for skin & Hair Pvt. Ltd, Sadhvi Jaya Bharti - Representative - Prisoner Reformation & Rehabilitation Program & Spokesperson Divya Jyoti Jagrati Sansthan and Ms. Sonal Mehta- VP Resurgent India Limited inaugurated the International women day at New Delhi.

On the occasion of International Women’s Day, ASSOCHAM partnered with IndiaFirst Life for an eye-opening Survey that proves that a woman needs right solutions to fulfil her financial needs while balancing between so many duties and obligations.

The Women Oriented Insurance Survey is a step in direction of identification of these needs for development of bespoke women centric insurance solutions to empower women in their every life stage.

The industry as a whole has to come together and address this concern and work towards financial literacy for women.

More women centric products are required, to attract women population towards life insurance.

More than 69% women said that they relied on their families while making any investment decisions, followed by self-reliant gen-next women at 28% who are starting to take these financial decisions on their own.

At the most, 23% of our respondents said that they depended on the subject matter experts or the financial advisors, whereas around 14% stated that they consulted their friends or relatives.

Presently, life insurance penetration in India is approximately 3% of the national GDP and a large portion of the population is considered low income. There is a potential for income growth of Indian women in the future which will convert them into a huge market for insurers.

On the occasion of International Women’s Day, we are delighted to release IndiaFirst Life-ASSOCHAM 'Women Oriented Survey'.

It is important to educate female customers about insurance as a risk management tool and ensure familiarity for long term sustainability.

The theme empowerment through Women Oriented Insurance in the report has been written aptly to tackle this issue.

IndiaFirst Life-ASSOCHAM 'Women Oriented Survey' observed that women are keen to opt for insurance policies which cover critical life threatening diseases, growing the accumulated assets, financial liquidity to fulfil life-style needs, building retirement corpus and shield from rising medical costs in the golden years.

“During the study we noticed that the highest number of respondents mentioned that amongst the tools available in the market today they would invest in Life Insurance to achieve their financial goals. Given this input from our report, we need to assess the reasons for the gap, both in terms of the number of women consumers as well as sales professionals” she added.

The methodology adopted for the study was a quantitative, structured survey, which was circulated among over a carefully chosen sample size of 1,500 Indian women, pan India.

The survey was based on a questionnaire that covered a holistic picture to understand women and their relationship with money. It focused on buying behaviour and investment habits across various demographics with more detailed insight on their insurance preferences, if any.

Through the survey, we observed that majority of women in each age band have inculcated a habit of saving their money on monthly basis for wide spectrum of financial needs.

While the maximum number of respondents (42%) opted monthly investment nearly 13% respondents invested quarterly, 9% half yearly and 17% went for yearly investments. This could be due to comfort in smaller contributions to bigger amounts.

It is interesting to note that the relative percentage of respondents having monthly frequency of investment increases in each subsequent life stage group i.e. 39% of the single women, 40% of married women with no children, 48% of married women having young children and 53% of married women having one or more adult children have a monthly investment frequency.

Currently, India is one of the nations with the highest young populations. With amedian age of 28 years, 90% of Indians will still be below the age of 60 by 2020 and 63% are expected to be between the age group of 15-59.

The target population for the insurance industry, is therefore, increasing in India and would boost industry growth.

These facts are substantiated by age distribution of our respondents, 44% of them belong to the age band of 31-45 years while 36% are below the age of 30 years.

It is interesting to note 54% of the respondents in age band of 31-45 years have a monthly investment frequency but only 26% expressed willingness to invest in the online products.

In the age band of less than 30 years, 55% of the respondents have expressed willingness to invest in insurance and 61% of them save less than INR 50,000 per annum.

About 53% of the respondents in the age band of less than 30 years and 46% of the respondents in the age band of 31-45 years prefer short term (less than 5 years) time horizon for investment.

The largest numbers of the respondents covered under the survey are Homemakers (39%) while 52% have a job or are self-employed. Majority of the employed respondents about 33% are from Private Sector.

Only 2% of the respondents have retired from a job, these are probably sub-set of 6%of the respondents who are above the age of 55 years.

More than two thirds of women in India are breadwinners or co-breadwinners in the family. But when it comes to their financial planning they are dependent on men in the family. Women mostly view Life Insurance as a pure protection product and don’t see the need for separate life insurance cover from their husband or other male family members.

About 47% of the respondents have shown preference for Money Back Plans, expressing the need for financial liquidity to maintain their expenses in the short term.

The next most sought after life insurance product is Whole Life Policy with 35% of the respondents preferring it.

The Whole Life Policy has plethora of benefits; it provides coverage for life, it can help in meeting the retirement and long term saving goals by providing liquidity in one’s golden years, the loan option is available on Whole Life Policy as the surrender value of the policy increases over time and it is ideal for estate planning individuals who want to pass on their estate to their legal heir as it helps to create wealth.

The respondents have shown lower interest in Endowment Plan and Unit Linked Insurance Plan with 25% and 20% responses respectively.

48% of the respondents conveyed their interest in a dual benefit of Lump Sum and Monthly Income demonstrating the need for financial liquidity to fulfil life style needs and additional income to offset growing inflation.

Whereas, 46% of respondents exhibited interest in the option of limited and regular premium payment, this is a clear manifestation of the respondents’ mind set-to save regularly but for shorter duration of time.