Relying solely on employer insurance plans isn’t a good idea in terms of comprehensive coverage. To understand the context better, let’s deep dive into a recent study that explains the gaps with clear data points on how many Indian employees remain underinsured and sadly, do not realise it till an emergency or an unforeseen event takes place.
A study reveals 96 per cent of Indian employees are underinsured
A whopping 96 per cent of employees in India are underinsured, as per findings of an SBI Life Study conducted in partnership with Deloitte India, and published in 2023. Notably, ‌fieldwork for the aforementioned third edition was conducted in June this year. Further, around 5000 respondents spanning 41 cities and towns nationwide were polled for this survey. While the survey has taken inputs from different places across the country, a notable fact is the general lack of awareness among them as to exactly how much coverage they believe they need versus actual reality.
Simply put, around 96 per cent of employees covered by employer-provided insurance believe it offers sufficient coverage. And sadly, they are mistaken.
Employer insurance plans: Employees remain underinsured
Given inflationary pressures and the rising cost of daily consumption posing grave concerns for Indian households, grappling with rising healthcare costs and education expenses has triggered concerns about managing risk and investments in a balanced way. The biggest problem with employer group insurance is that inflationary trends are not taken into account. As a result, ‌employees and their families are underinsured but sadly, they do not even know this! Worse, they do not opt for separate coverage for family members or their personal needs, believing that they are adequately covered.Â
An obvious issue with employer insurance plans is that they lack personalisation and therefore, leave employees and their loved ones underinsured. In the case of women who are planning to start a family, not all employer insurance plans may provide adequate maternity coverage. Hence, it becomes essential for women professionals to prioritise maternity coverage independently. For those who are homemakers and managing risk at several levels in daily life, there are flexible options to buy insurance cover up to Â
The lack of personalised solutions in employer insurance plans
Given that personalisation is not offered by most plans, the same scenario is applicable for new age insurance solutions that now offer comprehensive cover for couples who have to opt for IVF treatments or require comprehensive insurance cover while living with a same-sex partner.Â
Several insurance-centric facts and findings are mentioned in SBI Life’s third edition of the Financial Immunity study. A few notable points are as follows:Â
Around 49 per cent of Indians invest in mutual funds and equities while managing their expenses.
41 per cent are creating their own secondary sources of income.
37 per cent are either purchasing or increasing their life and health insurance coverage.
For 43 per cent of consumers, inflation has been ranked as their primary concern.
Around 42 per cent of the annual income of consumer households is being allocated to strengthening their financial immunity.Â
Though term insurance policies offer a large protection cover at highly affordable rates, this has lagged behind savings plans in terms of consumer preferences.
Child insurance, and retirement plans which have an embedded ‌savings element rank third and fourth respectively on the preferred policies list.
Clearly, the biggest gap pertains to awareness of whether a cover is adequate for their needs!
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We make sure there is no complex jargon or paperwork - we enable transparency in a way that makes insurance solutions relevant and easy to understand.  Â
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