National Insurance Awareness Day 2024: Closing India’s protection gap for enhanced financial security

financialexpress.com:

National Insurance Awareness Day has evolved over the years to become an important annual event that highlights the crucial role of insurance in protecting individuals, families, and businesses. The goal of National Insurance Awareness Day is to help people understand the different types of insurance available, to empower people to make informed decisions about their insurance coverage and to recognize the value that insurance provides in safeguarding their financial well-being. By taking proactive steps to review and renew their insurance policies, individuals and businesses can have greater peace of mind and be better prepared to handle life’s unexpected challenges.

Despite significant progress in recent years, India still faces a substantial gap in insurance awareness and coverage. According to a report by the National Insurance Academy (NIA), over 40 crore individuals in India, constituting more than 31% of the population, lack health insurance. This health protection gap is attributed to lower penetration, coverage inadequacy, and rising healthcare costs.

The life insurance sector also exhibits a large protection gap, with an 87% gap across the country. The mortality protection gap is particularly high among younger age groups, exceeding 90% in the 26-35 age bracket.

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Some of the key gaps and challenges prevalent in insurance sector:

Low Insurance Penetration and Density: India’s insurance penetration (premiums as a percentage of GDP) was just 4.2%, well below the global average of 7.5%. Insurance density is also much lower than developed markets. This indicates a large protection gap, with a majority of the population lacking adequate insurance