Life insurance to remain important than other investments: Survey

The momentum of buying life insurance may have slowed down compared to the initial days of the covid-19 pandemic. However, it remains the top priority of those who have not purchased it yet or don't have adequate cover, according to a survey.

Almost half of the respondents in Tata AIA Life Insurance's Consumer Confidence Survey said they need to buy a life insurance policy in the next six months. Health was the second on the priority list, with 40% said they would purchase health insurance in the coming months. The survey reached out to 1,369 respondents across nine centres in the age group 25-55.

Unlike the pre-covid-19 times, people are more inclined to buy a term plan than a unit-linked insurance plan or a traditional policy. About 47% said that their views towards the term plan have changed. During the pandemic, 51% of respondents bought life insurance, and 48% bought health-related solutions. Of the total who bought insurance policies, 30% were first-time buyers of life insurance, and 26% purchased health policy for the first time.

The survey also looked at the other investments that respondents have made and plan to make in the next six months. During the pandemic, 33% invested in either bank or company fixed deposits, 30% invested in mutual funds, 24% bought stocks, and 17% purchased gold in different forms.

In the near term, 37% of the respondents plan to invest in mutual funds via systematic investment plan, 33% in bank or company FDs, 30% in stocks, stocks and 25% in gold.

"The survey reveals that, with changing money needs and priorities, consumers' monthly allocation towards insurance, savings and investment, has increased. With less discretionary spends and more focus towards essentials spending, consumers are motivated to save and invest more in life insurance than they were pre-covid-19," said Venky Iyer, chief distribution officer and head of marketing, Tata AIA Life Insurance.

Source: Live Mint