High premiums, difficult product know-how hinder insurance purchase: Survey

Inability to afford insurance products, along with difficulty in understanding them, are hindering a large proportion of Indians from purchasing health and life insurance, a survey by the insurance aggregator PolicyBazaar indicates.

The survey was conducted in February-March among over 3,300 respondents across 27 Indian cities, including metros, tier II and III cities. Participants were in the age group of 23-60 years.

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Over 40% of the respondents cited high premiums as the reason for not purchasing health and life insurance, whereas 53% cited difficulty in understanding the products/process as the reason. This indicates the need for early education on insurance, along with providing affordable, simpler products that offer key benefits minus frills, says the report.

The survey also found that trust and brand familiarity are key factors in people's decision to buy insurance. Around 80% of respondents considered insurance purchases based on personal recommendations from friends/family or a known insurance agent. Of all respondents, 58% and 64% said that they trust familiar or older brands when purchasing health insurance and life insurance, respectively.

The survey also says that a combination of online and offline mediums may be the way forward for the insurance industry, as 85% purchased the policy through an agent despite 80% browsing for information online.