Sanjeev Mantri, executive director, ICICI Lombard General Insurance said, “Insurance policies tend to have a lot of complex jargon, which is difficult to understand by a layman. This is where insurance literacy comes into play. The only way to accelerate financial inclusion and thereby insurance penetration in the country is by improving
financial literacy. ”
ICICI Lombard General Insurance, the second largest general insurer in the country,has published the findings of its ‘Quality of Insurance Literacy in India’ report.
Given that lack of awareness and accessibility are the top reasons for low insurance penetration in India, through this report, ICICI Lombard aims to understand the quality of awareness of general insurance in the country. This includes general insurance related information among users and intenders, misconceptions around insurance, which could pose as barriers to informed insurance purchase in India.
Sanjeev Mantri, executive director, ICICI Lombard General Insurance said, “Insurance policies tend to have a lot of complex jargon, which is difficult to understand by a layman. This is where insurance literacy comes into play. The only way to accelerate financial inclusion and thereby insurance penetration in the country is by improving
financial literacy. ”
Key takeaways from the study:
– 46% of the health Insurance(HI) owners claimed that they purchased their Health Insurance policy completely own their own while 51% of the intenders claim that they are very confident about choosing their health insurance plan completely by themselves.
However, among existing health insurance policy owners 42% had no understanding of
any of the common Health Insurance abbreviation such as NCB, OPD, TPA,
– 48% of health insurance policy holders were unable to explain any of the
common terms like 30-day waiting period, pre/post hospitalization, OPD cover
etc,
– Less than 1 in 5 of HI policy holders were able to correctly explain terms like
Sub-limits, Daily Cash, Free Look period, Reset benefit or day-care /inpatient
procedure
– 90% of the health insurance owners inaccurately believe that – Only expenses
during the hospitalization is covered in Health Insurance or hospitalization is
needed for a minimum of 24 hrs to avail insurance benefits
-Only 1/3rd of health insurance owners, are aware that HI cannot be claimed
from the 1st day of availing a policy
-28% of the HI Policy owners were unable to identify at least 5 items that are
important while calculating premium for HI
Motor
Similarly 60% Motor Insurance owners are very confident about their ability to select the
right insurance, however,
-Less than 20% of motor insurance policy owners have an understanding of
abbreviated terms such as IDV, or Zero-Dep
-Less than 25% of motor insurance policy owners fully understand the features /
terms such as IDV, Zero-Dep comprehensive coverage & roadside assistance
– Only half (49%) of motor policy owners believe that third party motor/ vehicle
Insurance is compulsory,
– Age of vehicle, coverage period and type of vehicle are the most top of mind and
acknowledged aspect determining motor insurance premium