Insurance Outlook: Volume 9
Mahindra Insurance Brokers Limited
Mahindra Insurance Brokers Ltd. is here to help you stay financially independent at every step of the way.
The research focuses on the responses received from 1000+ people on the awareness of Critical Illness cover and its correct disposition. The findings include what people think about Critical Illness cover, their confusion with health insurance and important factors while considering to buy the cover.
The report broadly explores:
Awareness about Critical Illness Cover is the highest among customers owning both health and life insurance:
Insurance awareness is largely driven by motor, life and health insurance categories. Awareness of other insurance categories is very low and often side-lined by intermediaries while pitching for insurance in general. The same is reflected in the awareness of Critical Illness cover. Approximately half of the people in the study mentioned that they have a fair idea about it.
Approximately one-fifth of the people haven’t heard about Critical Illness cover. This awareness is driven by Tier I cities (54%) compared to Tier II cities (46%). Insurance owners are exposed to other insurance categories more than non-owners. This is reflected in their disposition. On detailed analysis, awareness of Critical Illness. Cover is found to be highest among customers owning both health and life insurance.
Knowledge of the specific details and benefits of Critical Illness is found to be very limited even among people who are aware about this. Only 38% of aware people are able to correctly identify what is covered in a Critical Illness policy. 55% of people are confused about the coverage.
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Penetration of Critical Illness Cover is very low across tiers, age groups and irrespective of current insurance category ownership
Customers are influenced by the immediate acquaintances of their social group who own the insurance cover and advocate it. However, in case of Critical Illness due to negligence, the advocacy is poor.
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Very often, the Critical Illness cover is provided as an attachment product, where customers are either not informed about the benefits or don’t pay attention because they are in a hurry to close the prime financial transaction.
Individuals in the research who own the Critical Illness Cover bought it to secure their financial future and safeguard themselves from the potential financial needs related to critical illnesses.
89% of respondents who don’t own the Critical Illness Cover didn’t buy it because of many factors:
People from Tier I are more likely to buy a Critical Illness Cover than people in Tier II
We exposed unaware respondents to accurate information about Critical Illness cover, and most of them responded positively to the offerings.
Tier I respondents expressed more concern about health due to a sedentary lifestyle, processed food choices and pollution. This led to their positive disposition towards Critical Illness cover. People aged 31-45 years showed the highest level of disposition to know more about Critical Illness cover.
The prime objective of this is to protect the family in the hour of crisis.
Also, this age group is most susceptible to lifestyle-related diseases, which can lead to serious health-related complications. Respondents mentioned that they would consider a lot of factors when they would buy Critical Illness cover. They are very inquisitive to know what all Critical Illnesses would be covered.
To make a fair comparison, they would also evaluate the number of Critical Illnesses covered in each plan. Another important consideration would be the ‘premium’.
Based on affordability, people might let go of a few rare Critical Illnesses coverage. Consideration weightage of ‘Payment terms’ is as strong as premium.
People need a detailed explanation of payment terms (whether it is lumpsum, treatment expense coverage or lost income) before making the final decision. Other considerations include exclusion terms, sum assured and waiting period.