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Term and health insurance top priority amidst Covid-19 pandemic: Study

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NEW DELHI: Over 90% of Indians believe that health and term insurance is important for their financial safety and mental wellbeing, as per the findings by Policybazaar.com.

The survey conducted to celebrate National Insurance Awareness Day: 2021 understands the impact of covid-19 on insurance awareness and purchase behaviour of Indians in the last 15 months. Policybazaar surveyed over 6,000 existing customers who bought Term, Health, and Motor insurance from the platform. The survey was fielded to respondents between 18 June and 21 June.

Health Insurance

Motivated by the fear of contracting covid-19 infection, 61% respondents invested in a comprehensive health plan followed by 10% respondents choosing covid-specific policies. High medical costs (40%), fear of covid-19 and tax-saving benefits were primary reasons that triggered people to buy a health cover. Nearly one-fourth of the respondents received covid claims for treatment at home/domiciliary, while claims approved for those treated at hospital stood at 77%.

The pandemic led to a significant increase in porting requests as people are looking for policies with higher sum insured and better features. The survey reveals that 7 out of 10 people wish to port their health policies to a different insurer for a higher sum insured and better features like zero co-payment, no room-rent capping, and lower waiting periods.

Term Insurance

The findings revealed that over 3/4th of respondents purchased term insurance in the last 2 years due to the fear of covid. Nearly 9 in 10 respondents who purchased a term plan considered it a means to protect their family’s financial future and not merely as a tax-saving instrument (2%), as per the study.

Further, the survey findings denote that 72% of respondents bought their first term plan online from Policybazaar. When choosing the sum assured, 60% of Indians bought a term plan cover ranging between 50 lakh – 1 crore, 25% chose a cover above 1 crore.

Ideally, the sum assured of your term plan should be 15–20 times your annual income, and the policy tenure is until your retirement age. Interestingly, 6 out of 10 Indians buy a term plan with up to 61–81 years of age, which is India’s most common retirement age.

“During unprecedented times like these, it is important to understand our customer’s outlook towards insurance products and serve them with the right solutions specific to their needs. A well-insured nation is always better equipped to deal with economic uncertainties. Protection products are becoming the foundation of financial planning especially considering the impact of covid-19. The pandemic has definitely accelerated awareness around insurance and the quest to buy the right insurance plans”, said Sarbvir Singh, CEO, Policybazaar.com.

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