Monday, 27 May 2019
BREAKING NEWS

Indians use traditional insurance plans as investment tools: Survey – Economic Times

A majority relies on life insurance plans for long-term goals, finds Exide Life’s Money Habits Survey 2018.

I. Life insurance rules the roost
Despite low returns, life insurance plans are use to achieve primary goals

What is your source of funding to buy a house?
43% Life insurance
31% Bank savings
31% Mutual funds
26% Fixed deposits
22% Provident Fund

…to build a retirement corpus
49% Life insurance
34% Provident Fund
27% Mutual funds
21% Bank savings
24% Fixed deposits

…to fund kids’ education
38% Life insurance
29% Bank savings
28% Fixed deposits
25% Mutual funds
15% Provident Fund

…to fund kids’ weddings
29% Fixed deposits
28% Life insurance
24% Mutual funds
24% Gold
19% Bank savings

…to create a legacy
50% Life insurance
30% Real estate
25% Bank savings
23% Fixed deposits
23% Gold

II. Life coverage is inadequate
One in three has no idea what ideal life cover should be. Their current cover is half the ideal requirement.

Rs 20 lakh is the average life cover of those earning between Rs 2.5 lakh and Rs 5 lakh per annum.
Rs 30 lakh is the average life cover of those earning between Rs 5 lakh and Rs 10 lakh per annum.
Rs 50 lakh is the average life cover of those earning Rs 10 lakh a year and above

III. Self assessment of coverage overestimates preparedness
Nearly one in three feels he has enough to take care of his family, but many have no cover at all.

58% Feel they have adequate life cover through term insurance.
31% Feel they have enough assets to take care of their families
12% are planning to buy a term cover in the near future.
37% Of those earning less than Rs 5 lakh have no idea about life cover.
12% Do not have any life insurance

IV. Not too many are writing wills
Despite awareness about importance of leaving a will, execution remains low.

13% have executed a will.
14% haven’t heard about a will.
72% have heard about, but haven’t executed a will.
81% are saving and investing to build legacy corpus
14% have executed a will.

V. Digital documentation gets a thumbs up
Many have adopted digital modes to store critical documents.

45% maintain a scanned copy of key documents on their laptops or desktops.
39% store photos of documents on their mobile phones.
27% carry the documents with them in their bags or wallets.
13% use government apps like Umang or Digi Locker to store them.

Source: Exide Life Insurance Money Habits Survey 2018. The survey polled 2,408 respondents in the age group of 30-60 years across 12 cities. Figures do not add up to 100 due to multiple responses.

Source: https://economictimes.indiatimes.com/wealth/personal-finance-news/indians-use-traditional-insurance-plans-as-investment-tools-survey/articleshow/67299061.cms