Newspatrolling.com News cum Content Syndication Portal Online
Policybazaar’s latest report highlights critical gaps in health and term insurance adoption, financial preparedness, and risk perception—offering insights designed to help individuals make more informed financial decisions.
16th April, 2025, Gurugram: Policybazaar.com, India’s leading online insurance marketplace, has unveiled the 2nd edition of its highly acclaimed consumer insights report, “How India Buys Insurance 2.0,” following the success of its first edition. The report uncovers several key insights, including the fact that Indians continue to severely underestimate healthcare costs—nearly 48% of policyholders opt for coverage of Rs 5 lakh or less. At the same time, 47.6% of Indians remain unaware of term insurance and its benefits.
This comprehensive study delves into consumer awareness, needs, and challenges in purchasing health and term insurance. Based on responses from individuals across the length and breadth of India, the report highlights key gaps in financial preparedness and insurance adoption, offering critical insights for the industry.
Key findings of the survey
Health Insurance Now Among Top Three ‘Must-Have’ Financial Products for 28.3% respondents
Indians continue to favor traditional financial investments such as gold, fixed deposits, insurance-linked savings schemes, and real estate. However, health insurance has now joined this list. However, health insurance has now joined this list. According to the survey, 28.3% of respondents ranked health insurance above equities, mutual funds, and government bonds.
Underestimating Medical Costs: A Widespread Concern
Despite the increasing importance of health insurance, a significant number of policyholders remain underinsured. A staggering 75% of health insurance buyers in India have coverage of Rs 10 lakh or less. The issue is most pronounced in South India, where 66% of policyholders have coverage of Rs 5 lakh or less.
Non-buyers also display a severe underestimation of medical costs. About 51% of them believe that critical illness treatments, such as cancer, kidney transplants, or cardiac procedures, cost less than Rs 5 lakh – which is far from the ground reality today.
Nearly Half of India Still Ignores Term Insurance
The awareness gap remains one of the biggest barriers to term insurance adoption in India. The survey found that 47.6% of Indians are unaware of term insurance and its benefits. However, there are signs of improvement. Industry-wide, term insurance grew by 18% in FY24, compared to a CAGR of just 2% over the past five years. The survey found that 56% of respondents who are aware of term insurance have a positive attitude toward purchasing it.
87% of Term Insurance Non-Buyers Critically Underestimate Their Family’s Financial Needs
A key issue in term insurance adoption is not just a lack of awareness but also a limited understanding of personal finance. Many non-buyers fail to consider key financial factors such as child education, marriage, loan obligations, spousal retirement, and medical contingencies when evaluating their family’s long-term needs. Experts recommend a life insurance cover of 15-20 times one’s annual income to ensure that dependents can sustain themselves for at least 10 years. Only 13% of non-buyers accurately estimate their insurance needs in line with expert recommendations.
On the launch of the report, Sarbvir Singh, Joint Group CEO, PB Fintech, said, “We are delighted to release the second edition of How India Buys Insurance following the overwhelming response and industry discussions sparked by its first edition. This year’s report puts a spotlight on the awareness gap even more evidently than before. A large proportion of consumers plan to sell ancestral assets or borrow money during a crisis rather than opt for simple, accessible solutions like health and life insurance to protect their families. As an industry, it’s imperative that we strengthen awareness and improve the overall customer experience to drive broader adoption and ensure financial security for all.”
He added, “At Policybazaar, we remain committed to addressing these challenges. This report is one of our many initiatives aimed at increasing insurance penetration and bridging the protection gap across the country.”
How India Buys Insurance 2.0 reaffirms a fundamental truth—insurance isn’t bought in India; it’s nudged. While the findings highlight persistent gaps in coverage and financial planning, they also serve as a wake-up call for the industry. Consumers are signaling an urgent need for greater awareness, a deeper understanding of financial risks, and proactive education to prevent them from making insurance decisions only when faced with a crisis.
Click here for the full report- https://static.pbcdn.in/cdn/pdf/april_2025_how_india_buys_insurance_2.0_policybazaar_report.pdf
