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There is not enough awareness about the importance of Life Insurance in the Indian masses. Hence, insurance companies are striving to draw people’s attention to it. 'Sabse Pehle Life insurance' is a step in this direction.
The 'Sabse Pehle Life insurance' campaign is a combined effort of the major 24 companies that constitute the insurance industry in India. It follows right on the heels of the 'Mutual Funds Sahi hai' a similar effort to raise awareness about mutual funds, which was hugely successful and is credited with gaining massive popularity for Mutual funds. This campaign has a similar structure and agenda, the only difference is that it is promoting insurance. The companies are engaging people in local languages like Tamil, Telugu, Kannada, Bangla and Malayalam for regional outreach.
What is the need for awareness?
Insurance is regarded as an expendable need by many in India. There is even a misconception that an insurance policy is an unnecessary expenditure, and the money invested in the premiums can offer better returns if saved or invested in other financial instruments.
For a country as big and populated as India, Life Insurance penetration is not as much as it should be. Insurance constitutes a mere 3.69 per cent of India's GDP as per the FY18 report compiled by the Insurance Regulatory and Development Authority of India (IRDAI). The only large scale insurance policy active in the country is the 'Jan Suraksha' scheme which offers a cover of 2 lakhs on an annual premium of Rs. 330. The 'Sabse Pehle Life insurance' is intended to nudge people towards opting for insurance.
What are the challenges facing insurance companies?
Experts claim that a major reason for people not opting for insurance is the complex nature along with a host of confusing terms and conditions. This, in addition to the lengthy paperwork and the long list of documents required, act as a deterrent to buyers.
There is a variety of Life Insurance plans available in the market. The availability is not an issue, but the low financial literacy of the people is.
The main challenge is convincing the people that life insurance is the only avenue where the dependents and family can be secured in case of any eventuality. People view insurances as tax-saving tools. This leads to growing sales of basic plans due to people looking avail just tax benefits from them. However, high premium plans with more benefits have a few takers.
What is the solution?
According to experts, simplifying the plans in addition to more clarity on the products and simpler wording and purchase process can instil more confidence in people and encourage more people to opt for insurance. This is precisely what the promoters are targeting. The campaign aims at explaining the insurance products in simple terms that can be understood by the common man. Also, the industry leaders aim to organize the industry and simplify the process of applying for insurance so that they find more takers.
The campaign is expected to boost the sale of Insurance policies in the country, bringing more business for the insurance companies, and simultaneously securing the financial future of the masses.
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