INDIA PROTECTION QUOTIENT 5.0

Instituted in 2019, India Protection Quotient is an annual property by Max Life Insurance in association with Kantar aimed to understand the pulse of the Indian consumers in the financial protection space. Through the 5th edition of the study titled ‘India Protection Quotient 5.0’ the state of Urban Indians with regards to current financial security levels, changing savings & investment patterns, key anxieties & triggers of financial protection in a contemporary world is revealed.

INDIA PROTECTION QUOTIENT 5.0

Instituted in 2019, India Protection Quotient is an annual property by Max Life Insurance in association with Kantar aimed to understand the pulse of the Indian consumers in the financial protection space. Through the 5th edition of the study titled ‘India Protection Quotient 5.0’ the state of Urban Indians with regards to current financial security levels, changing savings & investment patterns, key anxieties & triggers of financial protection in a contemporary world is revealed.

Key Metrics of Survey

 

India Protection Quotient  

The degree to which Indians feel protected from future uncertainties, on a scale of 0 to 100. It is a proprietary tool developed by Max life with KANTAR for the purpose of assessing how protected urban India is. It is based on the attitudes, mental preparedness around future uncertainties, awareness and ownership of life insurance product categories (Term, Endowment and ULIP)

Knowledge Index

The degree to which Indians are aware of life insurance products, on a scale of 0 to 100.It is derived from awareness across life insurance product categories (Term, Endowment and ULIP).

Ownership Level

The degree to which Indians own Life insurance, on a scale of 0 to 100.
It is basis ownership of financial instruments (Term, Endowment and ULIP).

Security Level

The degree to which Indians feel financially secure and prepared on a scale of 0 to 100.
It is derived from consumer attitudes across a battery of 10 financial facets.
 

Who Did We Ask? 

 

Conducted entirely online, the India Protection Quotient 5.0 surveyed 4,610 respondents across 25 Indian cities including metro, Tier 1 & Tier 2 cities [from November 2022 to December 2022].

4610

Respondents

25-55 years

Age Group

> 2 Lakhs

Annual Household Income

25 Cities

(6 Metro + 9 Tier-1 + 10 Tier-2)

NCCS AB 

Households

70:30 Ratio

Males & Females

What Did We Find?

What Did We Find?

India Protection Quotient 5.0-43

Metro-47, Tier 1-42, Tier 2-36

Ownership Level 4.0 - 73%

Metro-82%, Tier 1-71%, Tier 2-60%

Knowledge Index 4.0 - 57

Metro-64, Tier 1-55, Tier 2-46

Security Level 4.0 - 63%

Metro-66%, Tier 1-61%, Tier 2-61%

 

Here are some of the key insights of IPQ 5.0 that highlight India’s shift across financial priorities and anxieties studied by India Protection Quotient 5.0:

FINANCIAL PREPAREDNESS OF URBAN INDIANS

Life insurance ownership is at 73%; investment seen in more diverse life insurance products

While the survey noted slight incraese in the life insurance ownership from IPQ 3.0, the respondents built a holistic portfolio by investing more in life insurance products including term (30%), market-linked (13%) and savings plans (38%).

Term Awareness at an all time high of 64%, but uptake remains an area of concern. Ownership levels of Savings products continue to grow

Trend in Savings and Luxury Expenses reset to pre-Covid era. Planning for uncertainties go down while savings for milestones go up. Kid’s education & marriage gain traction as savings objective

Inflation emerges as a predominant concern for urban Indians. Saving, Investment and Expenses trends reset to pre-Covid era —Share of wallet towards Luxury Items see significant rise; savings fall. Planning for uncertainties go down while savings for long-term milestones go up —Kid’s education & marriage gain traction as savings objective.

OUTLOOK TOWARDS TERM INSURANCE

· Alarmingly, Sum Assured and Rider Benefits getting de-prioritized by consumers while purchasing Term plans. Premium remains top-of-the-mind criteria

 

Share of high premiums reduce as a barrier impeding Term Insurance purchase diminish. Sum Assured and Rider Benefits getting de-prioritized by consumers while purchasing Term plans. Although feeling of insufficiency lowest in 5 years in urban Indians, 1 in 2 still feel their Term Cover is insufficient.

· Are Term Plans expensive…fewer Indians perceive so. Urban India’s focus shifts to Services & Experience; Medical tests & poor seller service emerge as strong barriers for Term Purchase

 

The survey also raises key issues on term plan purchase where 28% urban Indians have associated the plan with high premiums, 17% feel the policy has hidden terms and conditions and 18% attribute it to challenges in receiving refund in case of claim settlement. The insights highlight the need for better awareness, education on term plan and its benefits

· Agent and online are key channels for purchase, human connect is still the preferred mode of communication for future ownership

70% urban Indians purchase term plans through the insurance agent, while 16% make their purchase online, highlighting the importance of both ‘DIY’ and agent support for consumers. The ‘human connect’ in financial services is an important aspect.

 

MILLENNIALS & NON-MILLENNIALS

· Protection Quotient for life insurance products among millennials and non-millennials was at par with 43. Realizing importance of protecting their near and dear ones in these unprecedented times, As Millennials come of age, Term insurance ownership increases by 50% over the past five years, 19 to 29.

 

MEN & WOMEN

· The survey witnessed a marked increase in the knowledge index for women, from 36 (IPQ 1.0) to 51. While life insurance ownership was similar for both males (74%) & females (71%). Women closing in on gap with men on LI ownership, swiftly. India Protection Quotient increases for both genders over the last 5 years.


SALARIED VS SELF-EMPLOYED

· Protection quotient of salaried individuals increased from 38 in IPQ 1.0 to 48 in IPQ 5.0, overtaking the self-employed segment which remained at 42. Term ownership for the salaried segment increased from 71% (IPQ 1.0) to 81% in IPQ 5.0, whereas for self-employed the ownership fell from 43% to 41%.

 

How Does It Affect You? 

As the Indian Protection Quotient (IPQ) indicates financial preparedness against unforeseen circumstances, a progressive IPQ degree would ensure that India as a country is progressing towards a financially secured future. As more and more people in India become financially conscious about investment instruments, the financial impacts of unforeseen circumstances can be significantly reduced for the people we care about. As family is the basic unit of any society or nation, hence a financially protected family ensures a financially protected India. And a financially secured India will be unstoppable to become a developed nation and a global leader with happy & prosperous citizens.

Disclaimer:

 Indians in this context means Urban Indians.

The study is conducted in top 25 Urban metro, Tier 1 and Tier 2 cities; hence, its findings are representative of metro, Tier 1 and Tier 2 cities of Urban India only.

· Metro – Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Mumbai

· Tier 1 – Ludhiana, Jaipur, Lucknow, Patna, Bhubaneshwar, Vizag, Ahmedabad, Bhopal, Pune

· Tier 2 – Dehradun, Moradabad, Guwahati, Bokaro, Kolhapur, Jamnagar, Raipur, Ujjain, Hubli-Dharwad, Tiruchirappalli

· IPQ 3.0 Express vs IPQ 5.0 data comparison is amongst 25 markets only [6 metros, 9 Tier 1 and 10 Tier 2]

· The minimum sample to conclude any findings of the study is 270 with an error margin of +-5.964%.

ARN: PCP/IPQ5/220123

 

Know More on Past IPQ Editions

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