Life insurance is the most preferred investment option by Indians
The world of private players
There appears to be a consumer divide between private and public players where insurance is considered. Most customers chose the state owned, LIC, for their first insurance policy. However there is a strong tendency to look at private players for subsequent policies.
Private players are seen to provide additional investment options and are considered more transparent. The door step service provided by them is preferred by respondents. On the flip side, the high charges and hidden costs of private insurance companies act as a deterrent for respondents. Respondents think that private players are new in business, thus this is often a barrier for a long term commitment. They also score low on providing better product portfolio and services.
Change in insurance policies sought, with changing Lifestages
The survey also found that respondents in their Spending years (average age 32 years) had a greater knowledge about, and exposure to ULIPs and equity investments than other consumer segments. The respondents in their Responsible years (average age 35 years) displayed the highest insurance penetration – again topped by traditional insurance, and had higher awareness and penetration for Child plans. In the Settlement years (average age 41 years), along with insurance, high penetration was seen in Gold and Property. The least insurance penetration was seen for respondents in Worried years, who have high penetration levels in Gold, Bank FDs and Post office savings.
ULIPs - the new star?
Interestingly, awareness of ULIPs was significantly lower than that of endowment, money back, child plans and term plans. This was despite the high proportion of ULIP sales in the recent past.
“Customers often buy policies without knowing that they are ‘ULIPs’. To them the purpose of the policy – life protection, investment, child plan, retirement planning – gains precedence over the investment mechanism of the policy. ‘ULIP’ awareness is further clouded by low levels of equity participation by Indian customers. We expect ULIP awareness levels to go up as the market matures”, continued Karmakar.
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(This is Press Release of Nielsen Company, January 15, 2009)
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