Life insurance holds the key to strong financial immunity: SBI Life’s Financial Immunity Survey 2.0

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The Covid-19 pandemic has been disruptive in more ways than one. It had a tremendous effect on businesses and people’s lives. This has caused individuals to become hyper aware of the financial risks associated with critical illness and mortality. In a way, this was a wake-up call while highlighting the importance of building physical immunity as well as having strong financial immunity.

At least 80% of Indians feel highly prepared for the physical immunity that results from taking a double dose of vaccine and adopting a healthy lifestyle. About 74% of Indians are fully immunized which gives them the boost to be physically immune. Similarly, around 57% of Indians believe that financial immunity equates to financial security and stability. Additionally, 78% of Indians believe that insurance is extremely important in the overall financial planning process.

SBI Life commissioned the “Financial Immunity Survey 2.0” with NielsenIQ (India), reaching 5,000 respondents in 28 key cities spanning India.

Areas of intervention of the survey:

  • Impact of vaccination on consumer attitude

  • Change in behavior/actions after one year of coping with the pandemic

  • The changing role of life insurance in the financial planning process

In the context of uncertainties around employment, salary cuts, in addition to health problems, the need to strengthen financial immunity has been further reinforced. In fact, 79% of Indians suffered a reduction in income, of which only 44% of citizens’ incomes returned to normal. However, 35% of Indians are still facing a drop in income, according to the survey results.

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This impacted 64% of Indians on their milestones related to wealth/savings accumulation, travel, raising children, to name a few.

In addition, the three main concerns of Indians include:

  • Increase in medical/treatment costs (59%)

  • Job instability (59%)

  • Concerns about the health of self/family members (58%)

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These results indicate that Indians are also concerned about their financial immunity over their physical immunity. As a result, 60% of Indians started spending less on non-essential items and then using their emergency funds and receiving financial assistance from family and friends. The good part is that 50% of Indian income is more focused on building financial immunity through savings/investments and insurance.

Life Insurance – The Key to Strong Financial Immunity

These figures mentioned above provide more food for thought on life insurance. Whereas life insurance provides a safety net for your family and loved ones, helping them to cope financially during an otherwise difficult time. Ultimately, this provides assurance that your family would be financially protected in times of uncertainty. In addition, considering several expenses – such as medical expenses, higher education, critical illnesses, among others – as well as the increase in the cost of living, it is imperative to have a life insurance that can take care of of the family and allow them to pursue their lifestyle. Life insurance provides income replacement that can pay for education, health care and more.

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In this regard, the regular self-assessment of one’s financial immunity allows one to keep any uncertain situation at bay and to prepare oneself/one’s family to face any financial crisis. Undoubtedly, at least 46% and 44% invested in health and life insurance for the first time after the March 2020 pandemic outbreak respectively. Also, three out of four Indians have increased their savings/investment since January 2021, while 50% plan to invest in savings/investments/insurance, according to the survey. At the same time, 70% of Indians believe that life coverage should continue to increase when important life milestones are reached.

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The reality on the ground in figures

That said, while consumers believe they are financially prepared, the reality on the ground is totally different. Going by the numbers, Indians remain underinsured as the ratio of life cover to personal annual income is only 3.8 times, which is well below the 10 to 25 times the recommended annual income.

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However, in the face of an emergency when an individual files a claim, the seriousness of the situation comes to the fore. Currently, being underinsured is almost equivalent to being uninsured.

In the long term, underinsurance can have wide-ranging repercussions, including creating financial hardship and challenges should your payment remain insufficient to meet your family’s financial needs. Financial difficulties can also seriously affect family members. Whether it’s your partner, children or extended family members, those you are responsible for can suffer negative consequences if you experience financial difficulties.

In summary

Life insurance is a great tool both for protection and to help an individual form a habit of saving in a disciplined manner, which ultimately leads to the creation of a financial safety net for the long-term family. term.

Moreover, considering that the financial situation of each individual is different. Knowing why life insurance is important to your own financial plan could be helpful in choosing a policy that best suits your needs.

Considering that the current global health crisis is not a one-time situation, it all the more reiterates the need to purchase adequate life insurance and secure the financial future of family members.

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