KOCHI:
Aditya Birla Sun Life Insurance (ABSLI), the life insurance arm of the Aditya Birla Capital Limited (ABCL), unveiled its survey – ABSLI Protection Survey 2018 – assessing the uncertainties faced by people in India.
The comprehensive study unveiled some key findings related to the worries of individuals in Kochi: 83% respondents in Kochi feel that life is extremely uncertain. The level of uncertainty has risen significantly in the last 5 years. Kochi is the 4th last market after Kolkata, Patna and Chennai in terms of uncertainty amongst 13 markets. Inspite of the increase, the levels of uncertainty in Kochi is lower than the other cities.
More than 80 % people feel life is more uncertain now majorly due to instability of jobs and income. Rise in health related issues and its impact on the medical cost at 58 % is another reason for the increasing uncertainties.
What are people feeling uncertain about?
At 95%, ‘Self and Family’ is the prime uncertainty among people in Kochi. While, 87% are feeling uncertain about ‘Wealth & Savings’ and ‘Future value of money’.
While ‘Child’s education’ is still the matter people in Kochi are most uncertain about, it has decreased over a year from 52% to 35%.
Securing ‘self and family from any critical illness or disability’ is now the second most top uncertainty people have in Kochi at 29%. Retirement related worries have significantly increased in the city 7% in 2017 to 18% in 2018.
People are aware of uncertainties but are they prepared to face them?
At an average of 5 financial products per person, people who feel that they are prepared to face uncertainties have slightly higher ownership of various financial products enabling them to be more confident.
At 5.4 products per person, people who feel life is uncertain but are feeling completely prepared to face the uncertainty are higher.
Preparedness towards protection against uncertainties has gone up
o 58% of the families in Kochi have more than 1 person contributing to household expenses. This reflects on people’s increasing aspiration towards a more certain life.
Still close to half of the households are single earning and higher than the national average.
o At 34%, individuals in Kochi are able to save at least a quarter of their income as compared to rest of India.
48 % people in Kochi feel that retirement planning should be done early in the age when one starts to earn, which shows an increasing trend in the last 5 years.
How many know that Life Insurance can financially protect them better?
o At 70%, life insurance ownership in Kochi has seen an increasing trend. However, sharp rise has also been observed in Health Insurance, Medi-claim and Real Estate investments.
o At 70% and 58%, skew towards ‘Child plans’ and ‘Wealth plans/ULIPS’ respectively, is higher in Kochi. People here still mostly prefer to purchase child plans. o At 74%, Life insurance ownership in Kochi is higher amongst those who feel life is uncertain and they are prepared to face their uncertainties
But, are they prepared enough?
o Although 80% of the individuals are aware of the amount required to protect their family against financial uncertainties, the extent of actual cover is much lesser than annual Income of the family (at 1.45 times the annual income), leading to such high uncertainty and non-preparedness in the city. As per research, the average life cover that an individual should ideally have is around 7 to 10 times of one’s annual income
Pankaj Razdan, MD and CEO, Aditya Birla Sun Life Insurance, and Deputy Chief Executive, Aditya Birla Capital, said, “The Protection Survey 2018 is a real eye-opener as it broadly reveals the preparedness of urban Indians across various segments of society towards protecting self and family. It is heartening to learn that in spite of the many uncertainties they face in life and are worried about, people are aware of the need to safeguard their family’s interests and are willing to take steps towards the same.”
He further added, “The biggest worry is that, there is right intent but lack of financial awareness. While some are just worried and are not taking any measure, some have taken actions but not the appropriate ones. Therefore, I urge every individual to take informed decisions and opt for adequate protection solutions and appropriate products. This will help them to reduce uncertainty and fulfil their life goals.”
