Since the nationwide lockdown in March 2020, urban Indians have grown more “anxious” about financial security, the Max Life India Protection Quotient 3.0 (IPQ 3.0) survey showed. Anxiety levels climbed up from 55% to 61% this year, the survey said.
Indians were most anxious about the possibility of a family member catching the Coronavirus or death of a breadwinner. The potential cost of treatment also added to the pressure.
There is a significant shift towards increasing savings and investments, the survey said. “Financial anxieties related to Covid-19, and ability of current earnings to cover expenses have emerged as top concerns for Urban Indians,” it added.
As financial security increased, India Protection Quotient moved up four points from 35 to 39 in the latest survey.
India Protection Quotient measures the degree to which Indians feel protected from future uncertainties, on a scale of 0 to 100. It also takes into account attitudes, mental preparedness around future uncertainties, awareness and ownership of life insurance product categories such as term and endowment.
The survey was conducted by Max Life Insurance Company Ltd in collaboration with Kantar and recorded the responses of 4,357 people accross 25 cities in the country.
Savings up, expenses down
Savings and investments rose from 41 per cent in the previous survey to 50 per cent in the latest one, the company said. While basic expeses fell from 44 per cent to 41 per cent, luxury outlay went down from 14 per cent to 9 per cent.
Coronavirus also changed the objective of savings. Earlier just 35 per cent saved for untimely death of a breadwinner but now 41 percent do it. Saving for old age security also witnessed a bump with 62 percent saving for it as compared with 57 per cent earlier.
Awareness of insurance and uptick in demand
As the anxiey of catching Covid-19 or cost of treatments hightened, Indians grew increasingly aware of life insurance products.
The Knowledge Index, which is calculated on basis of awareness of life insurance products inched up by 9 points to 55, the survey revealed. Life Insurnance Ownership levels also surgede 500 basis points from IPQ 2.0 to 71 per cent, the company said in the survey.
The pandemic also made millennials re-think their finances. Millennials demonstrated a 6 per cent jump in life insurance ownership–the group moved up to 70 per cent now from 62 percent in IPQ 2.0.
Working women are at par with men in Protection Index. “Despite 69% working women owning life insurance as opposed to 73% men, the former was found to be more attitudinally secure during Covid-19. While 59% working women were financially secure, only 57% men were found to be secure,” the survey said.
“While the survey has observed a positive trend in urban India’s approach to financial protection over the last three editions, there’s still a long way to go,” said Managing Director and CEO, Max Life Insurance Prashant Tripathy