988 Million Indians live without the security of life insurance

75% of Indians do not have any form of life insurance. See how these numbers reveal the actual picture.

988 Million Indians live without the security of life insurance

Every 3 out of 4 individuals (about 75% of the population) in India do not have life insurance, revealed an IRDAI report. This amounts to a whopping 988 million Indians who are yet to get life insurance, the report said. 

As per IRDAI’s Handbook on Indian Insurance Statistics, India had about 328 million life insurance policies in 2017. Assuming each policy belongs to a unique citizen, it means 25% of the population is covered by life insurance, indicating that 988 million live without the security of a life cover. If certain citizens have more than one policy, it follows that even fewer people are covered by insurance.

What is even more disheartening is that even those who have purchased life insurance are assured of only about 8% of the amount they might actually need to continue their standard of living after losing the breadwinner of the family. The families of the insured are currently not protected from the financial shock after a demise, as per analysis by global reinsurer Swiss Re. India’s 8% is a lot lower than the insurance coverage adequacy of 44% in Japan, 84% in Taiwan, and 67% in Australia.

Related: The impact of life insurance over the world 

The situation is even more precarious for those in the unorganised sector as they have to face higher financial instability. They work in low-income jobs with zero job security and in hazardous work conditions. The risk to life is more with no safety net. They also do not have any old-age benefits. All these risks can be reduced through insurance, which unfortunately they do not have.

Let’s look again at the numbers. 998 million is more than the population of all European countries combined. About 82% of India’s workforce works in the unorganised sector. This amounts to 392.31 million workers plus their families, which is more than the population of the United States. These many people in India live under constant threat and pressure of financial setbacks due to uncertainty. 

Related: Why do “I” need life insurance? 

988 million Indians do not have life insurance

“There are low levels of insurance penetration (life and non-life) despite numerous sources of risk such as rainfall (leading to income shocks in largely agrarian segments of the population), health shocks, and catastrophes such as floods or cyclones,” the July 2017 Household Finance Committee report of the Reserve Bank of India (RBI) pointed out.

India has seen an 8% increase in real premium collected by life insurance companies as per the IRDAI report. This is abysmally low when compared to Russia’s 48.2% growth and China’s 21.1%. 

When it comes to insurance penetration (the ratio of insurance premium to the country’s GDP), India’s life insurance penetration was 2.72% in 2016 – comparable to Brazil (2.28%), China (2.34%) and the US (3.02%), but lower than the world average (3.47%), the report said. 

Related: Common life insurance myths busted—numbers don’t lie 

While the above figures may suggest that India is on par with other emerging markets, India’s insurance numbers are actually sketchy. There is no data on unique people covered; the data we have only reveals the number of policies. Further, it does not give insights on income classes, geographies, etc.

The Indian government’s Ministry of Statistics and Programme Implementation acknowledges that the “statistical information currently available on insurance is scattered and inadequate".

Life insurance is a necessity in today’s time and age. It is time to build awareness and make insurance accessible to the common man. Learn why you need life insurance and how availing it can bring peace of mind and financial security to your family.


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