the 200 years of inheritance The insurance industry in India is a paradox, given its extremely low penetration rate in the country.

The Indians unfortunately remain unprotected against the vagaries of life. In case of death of a winning member, an average Indian only has about 8% of what may be needed to protect his family from the financial shock, according to a report from IndiaSpend, a data-driven public interest journalism initiative. "This figure is well below the forecast 44% in Japan, 84% in Taiwan and 67% in Australia," the report adds.

In addition, nearly 988 million Indians – or 75% of the country's population, or more than the European population – have no form of life insurance, according to the study based on data from governments and governments. 'industry.

Insurance premiums expressed as a percentage of gross domestic product (GDP), or "penetration" in industry, only 3.42%, far below the world average of 6.2%. The low awareness and limited scope of insurance companies are twin problems in the sector, resulting in low penetration.

That aside, most life insurance policies sold in India are endowment policies that seek to combine the dual benefit of life and investment coverage. The insurance coverage offered by these endowment policies is significantly lower than that offered by pure protection products or term insurance plans. This is one of the main reasons why Indians are not properly covered.

For example, the government-owned Indian Life Insurance Corporation (LIC) a lion's share market, offers 21 life insurance products. Of these, only three are futures projects, said IndiaSpend.

Then, generally, most Indians rely on the advice of their insurance agents to choose their products. Many abusive sales case by agents or banks were noted. Attracted by higher incentives, they usually bundle incorrect insurance products with gullible customers.

We must do more

At the same time, the government has intensified its efforts to improve insurance coverage by introducing risk protection systems, particularly for socially and economically vulnerable groups. However, it is far from enough.

"These schemes do not reach their goal of providing adequate protection against risks for low-income households," the report adds.

For example, the Narendra Modi government's flagship financial inclusion program, the Pradhan Mantri Jan Dhan Yojana (PMJDY), was launched in 2014 with the aim of providing a bank account to every Indian. It also provides insurance coverage with the debit card. But this coverage is only applicable if the account holder made a transaction 45 to 90 days prior to the date of the accident, according to the plan guidelines.

This is contrary to the objective of insurance coverage as more than 20% of the PMJDY beneficiaries had not even received a debit card. PMJDY data from December 2016 show. In addition, 48% of people holding an account with a financial institution in India have not deposited or withdrawn any amount in the past year, according to the 2017 report. Global Findex data published by the World Bank.

Providing insurance benefits to a greater number of Indians therefore remains a daunting task.