About 97 per cent of the households in Karnataka feel that they cannot survive for over a year on their present savings in case of the loss of major source of household income. Likewise 99 per cent of households in Bangalore are financially at risk. | |
| According to a survey 'India Financial Protection Survey' by Max New York Life Insurance Co Ltd (MNYL) and National Council of Applied Economic Research (NCAER) across the country conducted recently, while 51 per cent of the households in Karnataka keep their savings at home, 17 per cent of the households in Bangalore choose to do the same. |
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| Further, the study has found that 21 per cent of the households in Karnataka simply prefer to deposit their savings in banks and in Bangalore 56 per cent of the households prefer this mode of saving. |
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| Addressing a press conference here today, Rajesh Sud, executive director - distribution, MNYL said that the survey was initiated by them to find out how financially protected are Indian households by assessing how India earns, spends and saves. |
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| "In India, insurance is largely used as a tax and savings tool, rather than for protection. There is a need to reorient the consumer on the benefits of life insurance for both financial protection and long-term wealth creation," Sud said. |
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| The key findings from a sample of over 63,000 Indian households and 3,790 households in Karnataka and 560 households in Bangalore, across the rural and urban sectors indicate that there is a little or no awareness on the need for financial protection. Despite accelerating economic growth, a majority of people have inadequate financial protection and ineffective saving habits. |
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| Rajesh Shukla, senior fellow and project leader, NCAER said, the methodology adopted for this study was drawn from the best international practices. The study assesses the income, expenditure and saving patterns of households based on primary data. |
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| "There is a lack of understandng on the real benefits of life insurance towards both financial protection and long-term wealth creation. We will help our customers make the right choices to meet their financial goals, both for the short and long-term," Sud said. |
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| Sud said that financial risk, spending and borrowing habits of Indian households, their perceptions on financial security and low ownership of life insurance all point to significant opportunities ahead for the life insurance industry. |
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| This is evident by the fact that only 24 per cent of households own a life cover even as a vast majority of the population are aware of life insurance, he added. |
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