September 12, 2023
Coimbatore, 11th September 2023: SBI Life Insurance, one of the most trusted private life insurers in the country, unveiled the third edition of their comprehensive consumer study – ‘Financial Immunity Study (F.I.) 3.0’ titled “Demystifying the Consumer’s Illusions”. The study delves deep into the minds of Indian consumers, unravelling the myths surrounding financial preparedness and revealing the common illusions that hinder their path to true financial security. SBI Life commissioned the study in collaboration with knowledge partner- Deloitte, reaching out to 5,000 respondents across 41 cities covering the length and breadth of India.
Amidst a world reshaped by unforeseen challenges, the study unveils a stark reality that the Indian consumer’s perception of financial preparedness is often clouded by illusions that could have dire consequences leading them or their family members to have inadequate financial protection amidst life uncertainty. While 68% consumers believe that they are adequately insured, only a meager 6% of insured consumers in fact have sufficient insurance coverage.
However, there is still a reason for hope, as a promising 71% of uninsured respondents believe that insurance is an absolute necessity to achieve ‘Financial Immunity’. Additionally, an overwhelming 83% of individuals who are insured recognize the critical nature of insurance in achieving financial resilience, reveals SBI Life’s Financial Immunity Study 3.0.
Taking the concept of Financial Immunity to the masses, SBI Life has also launched a free to use ‘Financial Immunity Calculator’ which captures consumers’ profiles and current financial assets to provide personalized assessment of their Financial Immunity Score. The score acts as a reminder that preparing today fortifies the foundation for tomorrow. The ‘Financial Immunity Calculator’ also provides valuable suggestions on how individuals can bridge identified gaps in their financial preparedness.
Click on the link to calculate your financial immunity score: Financial Immunity Calculator
Speaking on the launch of Financial Immunity Study 3.0, Mr. Mahesh Kumar Sharma, MD & CEO, of SBI Life Insurance said, “At SBI Life Insurance, our vision has always been to liberate individuals to pursue their dreams, by securing the needs & aspirations of their loved ones. With our latest initiative the ‘Financial Immunity Study 3.0,’ conducted in collaboration with Deloitte, we continue to take meaningful strides towards achieving this purpose of liberating individuals by demystifying the illusions that cloud the true understanding of financial preparedness of Indian consumers. Our aim is to empower individuals with knowledge, tools, and solutions that will fortify their financial foundations and ensure their peace of mind in an uncertain world.”
He further added, “The findings underscore a critical need for a paradigm shift in how we perceive financial preparedness. It’s a matter of great concern that 80% of consumers acknowledge insurance’s pivotal role in financial security, yet a staggering 94% remain inadequately covered. This stark contrast between perception and reality drives our mission’s urgency. The study is more than just a report; it’s a call to action. We believe that every individual deserves the opportunity to build resilience against life’s uncertainties. Together, we can bridge the gap between perception and reality, and truly empower individuals to achieve ‘Financial Immunity’.”
Soumya Dwibedi, Partner, Consulting, Deloitte India stated, “As we introduce the ‘Financial Immunity Study (F.I.) 3.0’ we are delighted to contribute to this pivotal consumer study in collaboration with SBI Life Insurance. The findings reveal that a significant proportion of insurable consumers either lack insurance coverage or have inadequate protection, but living in an illusion of financial immunity highlighting a substantial gap between reality and perception. The study also highlights the key myths that aid this perception, underscoring the importance of raising awareness and providing targeted messaging, which aligns with IRDAI’s mission of achieving universal insurance coverage by 2047, a crucial step toward ensuring the long-term well-being of our citizens”.
“The insights of the study accentuates the need for a mindset shift reflecting how with both Life and Health coverage, consumers can be financially empowered. It underpins the fact that insurance isn’t just a financial tool but is a powerful means to fulfill dreams and aspirations of millions across the deeper pockets of our country. To achieve this noble goal, there is a need for the ecosystem to collaborate and help India create a future where financial immunity is a reality for every Indian citizen,” he added.
Further, the highlight of the report is the revelation of five pervasive consumer illusions that have marred true financial preparedness; overcoming these misconceptions can illuminate the path to a financially immune future:
Illusion 1: “Merely owning an insurance policy guarantees adequate protection”
• 68% consumers are living in an illusion having sufficient insurance coverage but the matter of fact is that only 6% are sufficiently insured under their current insurance policies
• In reality, 94% consumers are either underinsured or uninsured
Illusion 2: “Investments in financial instruments provide better security than insurance”
• In reality, 80% consumers believe insurance is an absolute necessity for financial immunity & 71% of the uninsured consumers feel insurance is a critical lever in building financial immunity
Illusion 3: “Insurance policies can be forfeited in the event of fund shortage”
• About 50% consumers revealed a tendency to prematurely surrender their policies
• But in reality, insurance policies can act as collateral for loans in time of need
Illusion 4: “Owning assets and savings is a replacement for Life Insurance”
• In reality, 62% consumers are not confident in their savings for the future
• Traditional investments like fixed deposits and savings are favoured by Indian households, but they offer different advantages compared to insurance policies
Illusion 5: “Employer-provided insurance cover is sufficient”
• 96% of employees covered solely under their employer provided insurance are underinsured
• In reality, employed provided insurance policies may not always be sufficient, depending on individuals growing needs