Underinsurance Concerns in India: Survey Finds Most Indians Lack Adequate Life Insurance
A new survey reveals a significant disparity between perception and reality regarding life insurance coverage in India. The ‘Underinsurance Survey 2025,’ conducted by Bajaj Allianz Life Insurance in collaboration with NielsenIQ, found that a vast majority of Indians believe their current life insurance is sufficient, despite falling short of recommended benchmarks.
According to the survey, a staggering 81% of Indians believe that life insurance coverage of less than 10 times their annual income is adequate for financial security. However, the actual life cover held by individuals averages only 3.1 times their income. This stark contrast indicates a substantial financial protection gap, leaving many families vulnerable in the event of an unforeseen circumstance.
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The survey, which polled 2,000 individuals across metro, Tier-1, and Tier-2 cities, also showed that even though more people are purchasing life insurance—the average age of first-time buyers has dropped from 33 to 28 years—awareness of adequate coverage remains low. Furthermore, the study found that one in three policyholders has never revisited their life insurance coverage, even after major life events, like marriage, the birth of a child, or a significant salary increase. Among self-employed and affluent individuals, this number climbs to 43 %.
“To truly safeguard one’s loved ones, it’s essential to assess coverage needs holistically—factoring in income, liabilities, and future aspirations. A simple rule of thumb is to have life cover at least 10 times one’s annual income, ensuring financial security when it matters most,” stated Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance.
India, despite being one of the world’s fastest-growing economies, has a total sum assured at just 70% of its GDP, which is far lower than that of the United States (251%), Thailand (143%), and Malaysia (153%). This discrepancy further emphasizes the critical protection gap in the nation.
Family responsibilities, higher income levels, and health concerns were identified as the key reasons for a person to purchase insurance coverage. The survey also noted that 46% of respondents prefer independent research before making such financial decisions.
With the goal of achieving ‘Insurance for All by 2047,’ experts stress the importance of closing the knowledge gap and encouraging informed financial planning for the long term.
