Max Life Insurance Company Ltd. (“Max Life” / “Company”) revealed that while young India feels grossly underprepared to face the financial instability caused by eventualities of life, their children’s financial future is the foremost concern that influences them to purchase term insurance.
As per the ‘India Protection Quotient’ survey conducted by Max Life in association with Kantar IMRB, while ‘getting lump sum at a future date for my child’s education’ was a term buying trigger for about 44% urban Indians, at 48% it was the biggest trigger for millennials with kids.
Aalok Bhan, Director and Chief Marketing Officer, Max Life said: “There are several key milestones in parents’ life that they go through which children’s are growing, right from nurturing values, to a good quality education in the early days and then to supporting their higher education and matrimonial plans. To achieve such milestones without any hassles, it is important to undertake financial planning judiciously. It is reassuring to see that young India understands the need for owning term insurance to secure their family’s future. Birth of child is the biggest trigger for millennials to buy term insurance, which confirms that children continues to be the fulcrum of financial planning for Indian households.”
As compared to the national average of 47%, awareness of term products is a comparatively higher at 50% among millennials with kids. The same is an indicator that the younger generation, who have young kids, have higher awareness of benefits arising from ownership of term insurance and are investing in it to ensure that their children’s aspirations are not compromised even in case of any eventuality.
Millennials with kids prioritize saving for children’s education and marriage over retirement planning
While nearly half of urban Indian millennials in the age group of 25 – 35 years believe in spending more on travel/ luxury and are not even thinking about financially protecting their families, millennials with kids are far more conscious of creating corpus to support life stage goals related to their children. A significant 79% millennials with kids save for their kid’s education while 55% save for their kids’ marriage.
So committed are millennial parents to safeguarding the financial future of their kids, that their retirement planning too takes a backseat. While almost 54% India saves for old age security and retirement, millennials with kids prioritize savings for goals related to their children over their own selves with 50% of them saving for old age security.
Families with children consider term insurance their first preference
The fact that 36% families with children consider term insurance as their first choice when it comes to buying life insurance indicates that millennial parents understand the risks of life and the need to protect against those risks by buying term plan.
At 52%, term insurance awareness among families with children is almost twice as compared to the awareness levels of 29%, among families without children. Consequently, families with children have a higher term insurance ownership of 24%, while only 12% families without children own term insurance.
About the survey ‘India Protection Quotient’
India Protection Quotient (IPQ) is a survey conducted by Max Life and Kantar IMRB that employs a three-dimensional approach to determining policyholders’ level of protection, by evaluating their life insurance ownership, awareness levels and mental preparedness around protection.
With a sample size of 4,566 respondents, the survey was administered to respondents of different demographics and age groups across 15 metropolitan and tier 1 cities in India. The survey primarily measured their level of knowledge and ownership of various life insurance products, degree of term insurance preference and penetration, primary fears and triggers to life insurance purchase, preferred channel of policy purchase, roadblocks to owning life insurance that served to validate the overall IPQ level pegged at a poor 35.
