Survey Reveals Almost Half of Indians Are Unaware of Term Insurance

New Delhi (India TV) — A recent survey has revealed a persistent awareness gap among Indian consumers regarding term insurance. According to Policybazaar’s latest report, titled ‘How India Buys Insurance 2.0’, nearly 47.6% of Indians are still unaware of term insurance and the financial protection it can offer to families.

Despite this gap, the term insurance segment has shown significant growth in FY24—recording an 18% year-on-year increase. This marks a sharp contrast from the compound annual growth rate (CAGR) of just 2% observed over the last five years.

The survey was conducted across 3,955 respondents from 27 metro, Tier-2, and Tier-3 cities in India. Among those aware of term insurance, 56% displayed a positive inclination towards purchasing it. However, many individuals continue to rely on ancestral assets or borrow funds during emergencies, bypassing straightforward financial solutions like life and health insurance.

One of the report’s central insights is the severe underestimation of healthcare expenses. Approximately 48% of policyholders have opted for health coverage of Rs 5 lakh or less, while 75% of health insurance buyers hold policies worth Rs 10 lakh or below.

Additionally, the study highlights a continued preference for traditional investment tools. Around 28.3% of respondents ranked health insurance above modern financial instruments such as equities, mutual funds, or government bonds. Nonetheless, savings-oriented insurance schemes, gold, fixed deposits, and real estate remain the top choices for many households.

The survey also found that 87% of individuals who have not purchased term insurance grossly underestimate their family’s future financial needs—another significant barrier to adoption.