Millennials Mostly Buy Term Insurance: Study

Mumbai, November 19: As per the India Protection Quotient survey conducted by Max Life Insurance in association with market research company Kantar IMRB, revealed millennials with kids feel grossly under-prepared to face the financial instability caused by eventualities of life. Children’s financial future is of foremost concern that influences parents to purchase term insurance.

As compared to the national average of 47 per cent, awareness of term products is a comparatively higher at 50 per cent among millennials with kids. It is an indicator that the younger generation have a higher awareness of benefits arising from ownership of term insurance and are investing in it to ensure their children’s aspirations are not compromised even in case of an eventuality.

Aalok Bhan, director and chief marketing officer, Max Life said, “There are several key milestones in the lives of parents when it comes to children, right from nurturing values, to a good quality education to supporting in their higher education and matrimonial plans. To achieve these milestones, 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 family future. Birth of a child is the biggest trigger for millennials to buy term insurance, which confirms how children continue to be the fulcrum of financial planning for most Indian households.

Prioritising saving for education and marriage over retirement plans

While nearly half of urban Indian millennials in the age group of 25 – 35 years believe in spending more on travel or 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 per cent millennials with kids save for their kid’s education while 55 per cent save for their daughter/ son’s marriage.

So committed are millennial parents to safeguarding the financial future of their kids, that their retirement planning takes a backseat. While almost 54 per cent saves for old age security and retirement, millennials with kids prioritise savings for goals related to their children over their own selves with 50 per cent of them saving for old age security.

Families with children consider term insurance as first preference

36 per cent families with children consider term insurance as their first choice when it comes to buying life insurance. This indicates that millennial parents understand the risks of life and the need to protect against those risks by buying term plan.

At 52 per cent, term insurance awareness among families with children is almost twice as compared to the awareness levels of 29 per cent, among families without children. Consequently, families with children have a higher term insurance ownership of 24 per cent, as against 12 per cent families without children, who own term insurance.