Bussiness

Tier II cities outperform metro areas in term insurance product sales: report

India’s Tier II cities such as Ludhiana, Jaipur, Patna and Pune have outperformed metropolitan areas in terms of buying term insurance or pure insurance products, according to a report.

According to the India Protection Quotient (IPQ) survey commissioned by Max Life Insurance, awareness of term insurance products has increased after the COVID-19 pandemic.

Steady progress has been seen in the preference of online channels to buy term insurance, while agents remain the main buying channel with 2 out of 3 urban Indians opting for it, he said.

The latest IPQ 5.0 study was conducted among 3,500 respondents in the top 25 cities.

As COVID-induced anxieties recede into the background, inflation has become a predominant concern for urban Indians, he added.

Starting with a protection quotient of 35 in 2019, India has come a long way, he said, adding that according to the latest edition of the survey, urban India showed positive movement, climbing

8 points on the Protection Quotient to 43, indicating steady progress in the country’s overall levels of financial protection.

The survey also revealed that urban Indians’ degree of knowledge of life insurance products or knowledge index increased from 39 (at IPQ 1.0) in 2019 to 57 and life insurance ownership levels increased by 800 bp since 2019 (IPQ 1.0) to 73 percent.

According to IPQ 5.0, with a respite from health-related concerns, urban India has started prioritizing investments in life insurance savings plans.

Max Life Insurance CEO Prashant Tripathy said: “We launched the India Protection Quotient survey five years ago with the aim of understanding India’s behavior and perspective towards financial protection, an important metric for determining the resilience of the nation”.

This year, he said, the study notes that urban India is transitioning to a safer space as health concerns take a backseat.

Furthermore, he said, while India has begun to recognize the real value of term insurance, property remains a challenge area that the life insurance industry will need to work hard to address.

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