Insurance can be classified into two basic categories: general insurance and life insurance. Before 1973, insurance was offered majorly by the private sector and we can measure the development of this industry in terms of two indicators: insurance penetration and insurance density. It has been showing a decent increase since 2001 whereas insurance penetration remained about 5 percent. Comparing India with other countries shows that it is a low-performing country when measured in terms of insurance density. However, increasing the level of awareness among the population about advantages of insurance sector can help in improving the situation.
According to a study, only 54 percent of the households heard about life insurance among the ones who were surveyed. And a large proportion connected insurance with loss of life only and was not aware of other forms. The study recommends the initiation of an advertising campaign to make people aware of the benefits of insurance. The study then surveyed in 2015 to analyze and compare the awareness levels in relation to a time before the insurance awareness program about the rights of the insured population according to the Insurance Act.
A number of initiatives are taken by the IRDAI and individual insurance companies in order to improve the awareness levels of the insurance and fill the gap in the Indian Insurance ratio. While there was satisfactory improvement among the insured and no insured communities, the rural-urban difference as per the pattern of responses given by insured and uninsured people didn’t show much difference. The proportion of households which are aware of life insurance is comparatively higher in the urban areas. The level of four-wheelers awareness is quite low in both types of areas of the country.
Nearly half households have taken policies as per the advice of insurance agents. They have become the most preferred option as approximately two-thirds of the rural areas and 70 percent of the urban areas prefer services given by the licensed agents while buying insurance policies.
Although the awareness about the insurance benefits is increasing rapidly among people, there is still a need to improvise methods in order to promote insurance services. Operators should stop principle of individualism and must begin to work collectively. Because of the faster rate of adoption in the online medium insurers should focus more on strengthening online presence in order to reach out to customers faster. Insurance needs to be sold through formal channels like banks as usually, people think of the insurance agents as some non-employed person who thinks only of his commission. After the survey, a higher percentage of households in India think life insurance as one of the best safeguards against risk. It also mentions the tax benefits and children’s education as a benefit of the life insurance in the present survey.
Also, promotion of mass acceptance of general insurance should be improved. Health insurance products should be made more people-friendly and the awareness of the novel products should be available in the remotest of residents. You can always look at Tripura’s example which highlights the requirements of regional tailoring and their potential benefits. This will be a constructive way in order to move forward and ensure higher insurance rates. People who have taken the insurance coverage should become role models for convincing others to purchase insurance.