Tier 2 cities performed the worst with a mere 17% ownership of term insurance plans.
While COVID-19 has pushed India to become more proactive towards financial planning, the attitude towards financial protection across metros, Tier 1 and Tier 2 cities remains strikingly different. Max Life Insurance’s India Protection Quotient (IPQ) 3.0 in association with KANTAR reveals that metros continue to feel the most financially protected with a quotient of 43, whereas Tier 1 and Tier 2 cities had a protection quotient of 38 and 33, respectively. Against the sharp increase in the knowledge of life insurance across India, the life insurance ownership level had risen the most to 66% in Tier 1 cities, however metros lead with 83% and Tier 2 cities were the least insured at 62% life insurance ownership.
Across term insurance knowledge and uptake, 65% of Tier 1 were aware of term insurance products, the most amongst metros (63%) and Tier 2 (45%). Despite that, conversation rate remained lower across Tier 1, registering only 30% term insurance ownership, whereas metros were the most financially protected in the face of adversities, with 33% term ownership. Tier 2 cities performed the worst with a mere 17% ownership of term insurance plans.
Despite being the most financially protected, metros witnessed the biggest dip of 6% in security levels to 62% in IPQ 3.0 from an earlier 68% in IPQ 2.0. Expectedly, Tier 2 cities continued to register the lowest security level of 46%, while Tier 1 had the lowest decrease of 3% to 61% in IPQ 3.0 compared to 64% in IPQ 2.0. The survey demonstrates that there’s much work to be done across smaller cities, especially Tier 2 to increase the level of financially security and long-term protection.
Note: IPQ 3.0 comparison with IPQ 2.0 is for 25 cities only (6 metros and 9 Tier 1 and 10 Tier 2 towns)
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