The Covid-19 pandemic, which has till now affected over 4.30 crore people in India and recorded over 5 lakh deaths in the country, has pushed several citizens to buy health and term insurance, a recent survey has found out. The survey, conducted by leading insurance provider Policybazaar has also revealed the growing level of propensity to buy insurance in Tier-2 and Tier-3 cities in India, hence indicating a sense of urgency spurred by the pandemic with respect to insurance awareness across the country. The survey was conducted to find out changing consumer sentiment towards insurance purchase, household finances and investments over the last two years of the pandemic.
“At 89%, the highest number of respondents willing to renew their health cover belong to tier-2 cities, as compared to 77% from tier-1. Similar trends were observed in term insurance, where 59% of respondents who want to increase their coverage belong to tier-3 cities, as compared to 26% from tier-1 cities. The survey results clearly point towards the sense of urgency spurred by the pandemic with respect to insurance awareness across the country,” noted Policybazaar in the online survey that saw 5,000 participants.
Steep Rise Reflected in Health Insurance Purchase/ Renewal
As per the survey, around 25 per cent of the participants contracted Covid-19 and were hospitalised, out of which 18 per cent of the individuals ended up spending over Rs 15 lakhs. Another 22 per cent were not adequately covered by their existing policy, while 13 per cent of the respondents did not have a health insurance.
“As many as 62% of the total respondents had an active policy and didn’t just depend on their corporate cover. The figures also vouched for the fact that Covid had acted as a catalyst in health insurance purchase. While 50% of these policies were bought after Covid first wave, 41% were purchased after the Delta wave. Also, 80% of these policies were family floater plans, thereby revealing a higher inclination towards ensuring sufficient coverage for the entire family,” the survey noted.
“Moreover, even as Covid’s graph continues to be erratic, over 80% of respondents still show a willingness to renew their health insurance and 35% of them plan to increase their cover. The reasons cited for the same are rising medical inflation, financial instability and covering more family members. Health insurance is, therefore, seen as an effective shield to provide 360-degree protection against these,” it added.
Larger Cover More Popular for Term Life Insurance
As the pandemic has taken away the lives of lakhs of people and still continues to do so, consumers are now more inclined towards buying term life insurances with larger cover to protect their dependents.
As of April 2022, 60 per cent of the respondents had an active term insurance policy, the survey shows. While 55 per cent of people prefer term insurance because they want a larger cover for a lower premium, 24 per cent want enhanced protection over and above their existing life insurance policy, indicating a rising awareness among consumers regarding the benefits of life insurance.
“The purchase trends bear quite a stark resemblance to health insurance. While 47% of the active term policies were bought after the first wave, 40% of them were purchased post-second wave. While the pandemic might have triggered the purchase of the policy, as many as 78% of respondents want to continue the policy even as things begin to get back to normal. 39% of them wish to opt for a higher cover, with the highest number of respondents (59%) belonging to tier-3 cities,” says the Policybazaar survey.