INSURANCE PENETRATION

As less than 10 per cent of Indians have life insurance cover, the way

forward to increase life insurance penetration is through

bancassurance.The bancassurance channel involves banks selling life

insurance to their clients.

Bancassurance is an important channel through which insurance cover

can be increased. Banks are accessible to almost the entire

population, and there is a level of trust that enables the selling of

insurance.

The lack of awareness runs deeper. Even people who have bought it

see it as a savings instrument and not as protection against accidents.

The survey finds that the primary reason respondents invested life

insurance was to use it as a savings instrument. Seventy five per cent

of the respondents marked “saving for future needs like child’s

marriage, education, etc.,” as the primary reason for investing in life

insurance.

A collaborative effort is required between banks and insurers for

developing a robust need-based selling process.