Affordability is a major concern for many Indians wanting to buy health and life insurance policies, according to a recent study by Policybazaar
Affordability issues and product understanding complexities act as significant barriers when it comes to buying health and life insurance in India, according to a study by Policybazaar. This further emphasises the need for simplified and affordable offerings to cater to diverse consumer needs
Affordability is a major concern for many Indians wanting to buy health and life insurance policies, according to a recent study by Policybazaar
The study, titled How India Buys Insurance reveals that high premiums are preventing individuals from obtaining insurance cover, or in some cases, adequate insurance coverage.
The research was conducted beyond tier-I and tier-II cities, encompassing the perspectives of tier-III India. Here are the main findings of the study.
Affordability Concerns: More than 40 per cent of respondents cited high premiums as a significant barrier when contemplating insurance purchases. The cost of premiums was often perceived as unaffordable, leading many potential policyholders to forego obtaining the necessary coverage.
Product Understanding Complexity: Another crucial challenge highlighted by the study were the complexities associated with understanding insurance products and processes.
Approximately, 53 per cent respondents found the intricacies of insurance products challenging, ultimately causing them to abandon the purchase.
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The study highlighted two recommendations.
Cost Effective Insurance Plans: The first recommendation was that insurers need to develop more flexible and cost-effective insurance plans to align to varying budgetary constraint.
Simplified Product Offerings: The second was that insurers should focus on simplifying their product offerings, as complex policy structures and a wide range of coverage options can be overwhelming for individuals seeking insurance.
“Insurers can address this challenge by streamlining their products and presenting them in a clear and straightforward manner. By offering simplified plans that cater to specific needs and providing transparent information about coverage, exclusions, and terms, insurers can facilitate a more accessible and understandable insurance purchasing process,” the report said.
Customer Education
The study also called for insurers to prioritise consumer education initiatives.
It said insurance policies can be overwhelming for individuals who are not well-versed with the industry’s terminology and technicalities. Besides simplifying the language used in policy documents and providing accessible explanations of coverage options, insurers can offer online guides, interactive tools, as well as conduct educational campaigns to explain the fundamentals of insurance and help them navigate the complexities of various policies.
This way, insurers can empower potential policyholders to make informed decisions.
Sarbvir Singh, CEO Policybazaar, said there was a need to understand evolving consumer needs to drive insurance penetration in India.
He said the insights gained from this study would guide the insurance industry in developing more consumer-centric solutions that addresses the barriers identified in the report. By focusing on building trust, simplifying products, and enhancing affordability, insurers can foster a higher level of insurance adoption across the country, he added.