The 2018 Money Habits survey interviewed an unspecified number of people from 12 Indian cities in order to understand how they see and use life insurance.
The majority claimed life insurance is their preferred financial tool when planning life goals.
- 50% said they’d use life insurance to leave money to their families
- 49% for retirement
- 43% to build a house
- 39% for their children’s education
However, when looking at planning their children’s weddings, Indians are also likely to look into fixed deposits – a fixed-term savings account – as well as life insurance.
While most of the respondents claimed life insurance is their top tool, 30% had no idea how much cover is required or needed.
Around 46% of those surveyed said they should have at least 10 times their annual income in their life insurance, but only 29% of them actually had that amount aside.
“Financial responsibility can be a complex concept to unpack, primarily because our ideas of what is financial responsibility are constantly evolving,” said Mohit Goel, director – marketing and direct channel of Exide Life.
“The concept of financial responsibility also encapsulates the idea of protection through adequate life insurance cover. The [Indian Government’s] Economic Survey 2018, states that the current life insurance penetration in India stands at less than 3% in comparison to other developing countries.”
Goel also said that while most Indians are looking at life insurance as a way to achieve their goals, 30% of those surveyed are still uncertain about it, as they struggle to provide financial protection for themselves and their families.
Planning ahead without a will
The survey also revealed that many Indians keep track of their financial dealings – either in written or electronic format.
However, while many are worried about financial planning and reaching their life goals, 72% of respondents have not yet prepared a will, even though they are aware of the importance of having one written.
According to Gohel, although attitudes towards financial planning are increasingly positive, financial literacy is an issue that needs to be addressed for Indians.