Virendra Pandit
New Delhi: Young professionals usually postpone buying life insurance, often until marriage. Shocked by rising infections and death toll during the second wave of Covid-19 in April and May 2021, however, many of them hurriedly bought term life policies.
Working from home, many of these professionals bought term insurance policies online to make sure their families are not forced to scramble for funds in case of an emergency.
Officially, India put the number of deaths due to Covid-19 at nearly 380,000, the third-highest after the United States and Brazil. Some experts claim that this number could be higher and were underestimated because of the low levels of testing for the virus.
The ticket size of the term insurance they bought was not known yet.
When a devastating second wave of the pandemic peaked in India during April and May, panicking the old and young alike, 30 percent more among those in the age group of 25- 35 years bought term insurance for the first time. The number was higher than in the previous three months (January-March 2021) combined, media reports quoting PolicyBazaar, India’s largest online insurance aggregator, said on Wednesday.
Term insurance purchases via another online insurance aggregator, InsuranceDekho’s portal increased 70 percent in May compared with March this year, reports said.
Insurers said the recurrence of the pandemic waves sparked higher awareness around the need for financial protection, particularly among youngsters. The trend of inquiries about insurance plans continued to rise even after the second wave of infections subsided late in May, as reports about prospects of a third wave continued to worry many.
“After clothes, food, and home, insurance has now become the fourth pillar for a middle-class family,” Ankit Agrawal, InsuranceDekho’s Founder and CEO, was quoted as saying.
The latest annual report of India’s insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI), said that life insurance penetration among the country’s population was 2.82 percent in 2019, compared with 2.15% in 2001. This is much less than the global average of 3.35 percent in 2019.
Term insurance plans are popular in India because they are often cheaper and pay the family if the insured dies within the policy’s payment period. However, there is no maturity benefit if they outlive the plan. Demand for other kinds of insurance, including various medical cover, has also risen.