Insurance most preferred financial product to protect family post-Covid-19: Study

Insurance has become the most-preferred financial product to protect the family against health emergencies post the Covid-19 pandemic with more people inclined to invest in insurance products in the next six months, according to a survey from Tata AIA Life Insurance.

According to a consumer confidence survey on the impact of Covid-19 commissioned by research agency Nielsen, life insurance turned out to be the most preferred financial tool driven by the need to secure family's future financially and the concern around medical emergencies.

The survey also found that most consumers would like to buy life insurance in the next six months as part of their investment plans.

The survey conducted on 1,369 respondents across nine centres revealed that during the pandemic, 51 per cent of the respondents invested in life insurance, while 48 per cent invested in health-related insurance solutions, which is higher than other financial asset classes.

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More than half of the respondents said their views towards life insurance have changed positively due to the pandemic and 49 per cent want to invest in buying a life cover in the next six months and 40 per cent intends to invest in health insurance.

The survey said 30 per cent of the people invested in life insurance for the first time during the pandemic, while 26 per cent invested in health-related insurance solutions for the first time.

Financial security against medical emergencies and expenses has become the topmost priority, with as many as 62 per cent mentioning about it and a majority of 84 per cent saying they are still concerned about self and family due to coronavirus. 61 per cent were worried about themselves/family and their top concern is the economic slowdown.

"Of the respondents concerned about self and family, 50 per cent are worried about mental health due to increased workload due to Covid-19 pandemic. Among female respondents, 55 per cent said they are concerned about the mental health due to the increased workload during the pandemic.

"41 per cent people are buying financial products online more often than before Covid-19 pandemic," the survey said.

Among the other asset classes, one-third of the respondents said they invested in bank or company fixed deposits, and 30 per cent invested in mutual funds, while 24 per cent invested in stocks, 17 per cent invested in gold/digital gold.

"Life insurance has clearly emerged as the preferred financial asset as per our Covid sentiment study. There is a distinct shift towards considering life insurance as the primary source of future financial protection, followed by health and wellness solutions.

"The survey findings have helped capture and unravel the transition in customer usage and attitude towards life insurance," said Venky Iyer, CDO and Head marketing, Tata AIA Life Insurance.

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, he observed.

Tata AIA Life said the motive behind doing the survey was to get a comprehensive understanding about consumers' usage and attitude pre and post Covid-19 pandemic towards financial instruments and type of life insurance policies.

The survey was conducted on salaried, business and self-employed male and female in the age-group of 25-55 years through computer-aided web interview.