India is home to one of the largest populations of millennials. In terms of absolute numbers, at 426 million, 36 per cent of India's population comprises of millennials. This number is greater compared to the US as well as China, where millennials make up for 21 per cent and 17 per cent of the total population respectively. The demographic will therefore present scope for exponential business growth across industries including life insurance industry where millennials are now the key focus segment.
The Max Life India Protection Quotient 2.0 (IPQ 2.0) survey revealed a positive change in Indian millennials' overall attitude and the path-to-purchase factor for life insurance products. With a protection quotient of 37, millennials in India are at par with the country's overall level of financial protection.
According to the findings of the survey, out of all the cohorts, the knowledge index increased the most for millennials. Over the course of 12 months, term insurance awareness among millennials increased from 45 per cent to 56 per cent while term insurance ownership increased from 19 per cent to 27 per cent. During the same period, non-millennials too witnessed growth in both term insurance awareness and ownership albeit at a lower rate. While term awareness about insurance among non-millennials improved by 7 per cent compared to last year, it increased by 6 per cent on term ownership.
Millennials are also growing more concerned about their financial futures. Among millennials living in metros, 60 per cent were most concerned about not being able to save enough for their future, 61 per cent were concerned about financial security of the family in case of breadwinner's death and 62 per cent were concerned about inadequacy of funds in case of critical illness. Tier I millennials were greatly anxious with regards to sustaining life style and expenses with current earnings, while for Tier II millennials, the financial security of the family in the absence of the breadwinner was among the key worries. An increase in anxiety about financial future can be viewed as a positive as the same will drive people to action which will in turn result in better financial planning and protection.
The way young India searches for life insurance information is also becoming distinct, revealed IPQ 2.0 survey. While online medium is the preferred medium of information search for 33 per cent millennials and 21 per cent non-millennials, offline is the more dominant medium of information gathering for 67 per cent millennials and 79 per cent non-millennials. Even within this group, the ratio of men to women who prefer between online and offline mediums of information is interesting to note. While 27 per cent women searched online in comparison to 29 per cent men, 73 per cent women preferred to search offline in comparison to 71 per cent men who searched offline.
Millennials today are far more evolved in their demands from life insurers and conscious of the various features of their policy. The IPQ 2.0 survey revealed that more than half of millennial term buyers (51 per cent) feel that the cover of their term plan is insufficient.
In the backdrop of these evolving preferences, life insurers will need to provide innovative product offerings and expand their omni-channel distribution reach to provide superior experience to this demanding segment of customers. A swift adaptation in response to changing needs of the millennials will be crucial to the growth of the life insurance industry.
Note: IPQ 2.0 comparison with IPQ 1.0 is for 15 cities only (6 metros and 9 Tier 1 towns)
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