Insurance yet to take deep roots in rural India
DECCAN CHRONICLE | Sangeeta G
Chennai: The penetration of life insurance in rural areas is significantly lower than the urban areas. Only 22 per cent of the rural population owns life insurance products as against 73 per cent ownership in urban India. At 27 per cent, the awareness about such products itself is minimal.
As per the survey by Max Life and Kantar, conducted across 113 villages, rural India scored 12 points on the protection quotient scale, compared to 43 points achieved by urban India. The life insurance ownership gap is even more pronounced with only 22 per cent of India’s rural population owning life insurance pro-ducts, compared to 73 per cent across urban India.
The survey has highlighted that with a Knowledge Index of 27, rural Indians are less aware of life insurance products, while urban India’s Knowledge Index was more than double at 57.
While the government push for ‘Insurance-for-All’ via schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana, Saral Jeevan Bima, and Pension Yojana have seen greater success, an effective public-private partnership only could enhance the life insurance penetration.
The low uptake can be primarily attributed to inadequate funds to buy life insurance, high premiums, and multiple buying formalities. Nearly half of rural Indians have not thought of buying life insurance to financially protect their families.