When we plan financially, we plan for all life’s certainties such as marriages, children’s education as well as retirement. However, when exceptional circumstances occur in life, we need to adapt. Adaptability is highly dependent on financial literacy.
According to an accredited financial literacy survey, traditionally, India hovers at around 24 per cent in financial literacy rates, which compared to 55 per cent in developed countries, is woefully inadequate. One of the most efficient financial instruments that contribute to financial literacy centerstage is Insurance. With the advent of the COVID-19 outbreak let’s understand the trends in insurance literacy which lead to financial certainty.
The Covid-19 pandemic has led to a sharp rise in awareness about life insurance. Consumers are now seeing life insurance as the first step towards long term financial planning to secure the lives of their loved ones. To make life insurance more comprehensible, insurance providers have robust plans to spread awareness on the true utility of life insurance across all customer segments. Insurers are not only handholding customers but also fully equipping the new policyholder with complete information to help them make an informed decision.
Encouraging insurance literacy helps to balance the existing risk covers with insurance products and services. Most insurance awareness drives aim to provide an accurate understanding of “fundamental necessities”, such as human life value, the purpose of insurance (protection of standard of living, education/marriage of children, retirement or managing wealth), medical issues, and corresponding riders, affordability, etc. Insurance awareness initiatives, help in financial literacy efforts and lead to stronger and comprehensive financial planning
Insurance providers are identifying newer avenues to digitize processes across the value chain to make life insurance propositions more accessible and user friendly. Upgraded chatbots and IVR options-with a choice of preferred regional language for communication-have led to lesser dependence on contact centers, for customers’ crucial policy-related information needs. The common collective objective of the industry is to integrate insurance and build insurance literacy as an essential part of the customer’s ecosystem.
Without sound financial understanding, one may not be equipped to make the right financial decisions or navigate difficult times with financial adaptability. The journey towards a financially inclusive India is futuristic, but we have progressed rapidly.
The Insurance industry has come together to devise a path to being ‘always-there’ in a customer’s ecosystem, especially in times of need. However, as Robert Frost famously writes, “But I have promises to keep, and miles to go before I sleep…”, the quest has just begun. We look forward to a time when each and every Indian citizen is financially empowered, protected, and has a long and healthy life.
By, Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance Company Ltd.