More insurance policies, less panic? New study data shows a pattern

Study finds financial anxiety drops 6-7 points when families hold four or more insurance policies across income groups

Owning more insurance products, not higher income, is what most reduces financial anxiety among Indian households, according to new research by Aditya Birla Sun Life Insurance. The findings suggest that diversification of protection and savings products play a bigger role in building confidence than salary levels alone.

 

The insight comes from the अ-Nishchit Index 2.0 study, based on 3,583 survey respondents and 21 qualitative interviews across India. The research measures how secure and prepared households feel about their finances.

 

Product depth matters more than income

 

The study finds a clear pattern, households that hold a wider mix of insurance and investment products report lower uncertainty and stress, regardless of income bracket, job type or region.

 

Uncertainty scores fall by nearly 6–7 points for households that own four or more insurance policies, compared with the national uncertainty score of 79. A similar, though smaller, effect is visible on the investment side — uncertainty drops by around four points when families hold four or more investment products.

 

In contrast, the average Indian household currently owns only about two financial products. This creates what the study calls a “preparedness gap”.

 

Why limited cover keeps risk high?

 

Researchers note that rising income does not automatically translate into higher financial security. Many higher-earning households still report anxiety where protection is patchy.

 

Common weak spots include:

 

·  Inadequate health insurance cover

 

·  Low or no term life insurance

 

·  No dedicated emergency fund

 

·  Over-reliance on a single investment type

 

·  Lack of liquid savings for short-term shocks

 

Households with limited cover are more exposed to medical emergencies, job loss, income disruption and market volatility. The study finds many such families fall into “highly anxious” or “steady climber” segments, where financial decisions are driven by caution rather than planning.

 

The four-pillar protection stack

 

The report highlights a basic four-part framework that repeatedly appears among more confident households:

 

·  Term life insurance

 

·  Health insurance

 

·  Emergency fund

 

·  Long-term savings or investments

 

Crossing the four-product threshold, across insurance and investments, significantly narrows the gap between how prepared people feel and how prepared they actually are.

 

What the study indicates for households?

 

The central takeaway is structural rather than tactical, protection layering works across income levels. Earnings alone cannot offset financial uncertainty. A broader mix of insurance and savings products improves resilience and reduces perceived vulnerability.

 

The study is perception-based and meant for research and awareness purposes. It does not constitute financial or investment advice. Households should assess needs and consult qualified advisers before buying financial products.