Term Insurance Buying: There is a rise in demand for term insurance among self-employed people in recent times. Policy Bazaar has released a report regarding this…
With time the demand for various insurance products is increasing in the country. As awareness is increasing among people, their understanding about insurance products is improving. A recent report shows that people’s perception regarding term insurance has improved in recent times. Especially self-employed people, who generally used to stay away from term insurance, are now buying more term insurance.
Policy Bazaar, a platform providing online services regarding insurance products, has released a report regarding term insurance. According to the report, in the recent past there has been a 10 percent increase in demand for term insurance among self-employed people. Policy Bazaar has also talked about the reasons for this increase in demand.
Demand is increasing due to these reasons
According to Policy Bazaar, earlier self-employed people faced difficulties in buying term insurance as most of the insurance options were designed for salaried people with regular income. Apart from this, earlier to get insurance policies approved, paperwork like Form-16 and complete information related to income was required, due to which non-salaried people had to face problems. Now that ULIP has become a popular option among the people, people running their own business are showing interest in investing in term plans also.
Policy Bazaar has prepared this report on the basis of policies sold to self-employed people during the first half of the current financial year i.e. from April to September 2023. According to the report, the share of schemes that did not ask for income proof information from self-employed people increased to 51 percent in these six months, which was 36 percent during the first six months of the last financial year.
Very important contribution of ULIP
According to the report, ULIP has played an important role in the increased demand for term insurance among self-employed people. Its share has been 41 percent. The most popular ULIPs include Tata Smart Sampoorna Raksha-Param Rakshak, HDFC Smart Protect, Bajaj Invest Protect Goal and Max Smart Flexi Protect Solution. All these schemes provide security and growth without the need for standard income certificate. Traditional ULIPs had a cover of up to 10 times the annual premium as their objective was only to provide returns, but these ULIPs provide life cover of up to 200 times.
Changes in underwriting methods
Changes in underwriting methods have also helped. Now, you don’t always need to show your income tax return or proof of salary. This means that most people, especially those who are self-employed or run their own business, can easily buy a term insurance policy.
Some other important points of the report are as follows:
- Self-employed individuals opt for term insurance coverage of approximately 10 times their annual income.
- Self-employed people start buying term insurance plans from the age of 26 years.
- The number of self-employed men among term insurance buyers is 89 percent while among women this figure is only 11 percent.
- Maharashtra leads in the number of self-employed people purchasing term insurance.
- After Maharashtra, Delhi and Uttar Pradesh are ahead in the northern region. Also in the South region, Karnataka, Andhra Pradesh and Tamil Nadu have seen the highest number of term insurance buyers.
