The findings are based on a survey by Assocham and IndiaFirst Life Insurance conducted to study savings and investment patterns of about 1,000 individuals in the age group of 18-35 years across Maharashtra.
“Higher cover at lower premium rates, simplified buying process aided with quick customer service and easy documentation makes life insurance a preferred financial asset,” showed the the survey titled, Household savings and simplification of insurance.
Nearly, two-third (70 per cent) of millennials preferred life insurance as preferred instruments, closely followed by mutual funds (69 per cent) and fixed/recurring deposits (64 per cent).
It said the respondents are quite cognisant about insurance as a financial instrument and are aware about the distinct types of insurance products with 35 per cent respondents preferring to invest in a term plan.
Nearly 63 per cent respondents are earning but about 60 per cent save less than 10 per cent of their income.
“This is a disturbing trend as such a narrow overview of the future can turn out to be a vast problem at later phases,” the survey noted.
It also highlighted that only 20 per cent respondents do recurring investments while 42 per cent make a single investment based on the savings available and three per cent invest haphazardly without following any fixed pattern.
The survey suggested insurance companies to come up with simple and easy to enrol plans to take care of such investment pattern.
There is a need to look for ways to bring out options whereby people can add up premiums to their policy whenever they have surplus funds and their policy benefits get increased accordingly, it said.