Urban India has witnessed a significant increase in life insurance ownership, which has now reached an all-time high of 78%, according to the India Protection Quotient (IPQ) 7.0 survey by Axis Max Life Insurance in partnership with Kantar.
This milestone indicates a growing shift in the mindset of Indian consumers towards prioritising financial security over traditional motivations such as tax savings.
The India Protection Quotient has reached a new high of 48, signalling improved awareness, ownership, and security when it comes to financial protection. The survey highlights how Indians are increasingly recognising the essential role of life insurance in long-term financial planning. Notably, the knowledge index, which measures awareness around financial protection, has also increased to 63 from 61 in the previous year.
A notable finding in this edition of the IPQ is that for the first time in seven years, “coverage” has overtaken “premium” as the primary factor influencing term insurance purchases. This change underlines a broader understanding of life insurance as an essential financial tool rather than a checkbox for tax planning. Three in four urban respondents now prioritise sufficient coverage over cost, reflecting a more informed and mature consumer base.
Despite the overall progress, the survey reveals a concerning stagnation in the protection quotient for working women, which remains at 48, compared to a rise from 47 to 50 for working men. Women also reported heightened concerns about inflation, healthcare costs, and the loss of a primary income earner. These figures point towards the need for more gender-inclusive approaches in product design, financial education, and distribution channels.
Awareness of term insurance has grown from 70% to 74%, and ownership has inched up from 31% to 34%. However, affordability continues to be a barrier, with 25% of respondents citing cost as the main reason for not purchasing a term plan — a rise from 21% in the previous edition. Despite this, the trend towards digital adoption is promising, with 22% of respondents now buying term insurance online, up from 18%.
Read More: Understanding the Gap: Why 40% of Non-Life Policyholders Struggle with Life Insurance.
Digital channels are playing an increasingly important role in expanding access to life insurance, especially among younger consumers and salaried professionals. The convenience, transparency, and ease of online transactions are contributing to broader adoption, positioning digital as a potential equaliser in financial protection.
The survey also shed light on GenZ’s evolving financial behaviour. With a protection quotient of 41 and two-thirds already owning life insurance, this cohort is proving to be financially conscious. Their goals — such as buying a house, car, or planning vacations — are marked by a more structured approach to personal finance, reflecting a shift towards long-term planning.
Salaried individuals continue to lead with a protection quotient of 52, showing strong uptake in life insurance. The self-employed segment, while showing increased adoption and confidence, is grappling with reduced ability to save due to pressure on household budgets, highlighting the uneven nature of financial preparedness across employment types.
Regionally, South India continues to set the benchmark for life insurance penetration, with notable gains in both term and savings-linked insurance products. West India followed closely, recording a peak term insurance ownership of 41%. In contrast, East India, though improving in awareness, still lags behind in actual ownership. Encouragingly, Tier-2 cities have seen life insurance ownership rise from 62% to 66%, narrowing the gap with metropolitan areas, where the protection quotient has reached a robust 86.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: May 6, 2025, 2:33 PM IST
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