For millenials, life insurance is more Yo than mutual funds and even fixed deposits

Last Updated: Fri, Oct 05, 2018 20:16 hrs
Insurance

The Association of Mutual Funds in India's tagline is Mutual Funds Sahi Hai, but for a larger number of millenials, it's life insurance and not mutual funds which is a sahi financial asset.

Apparently a survey of 1000 individuals in the age group of 18-35 from Maharashtra concluded by saying that many opted for life insurance as a better investment product rather than mutual funds.

In fact, the respondents placed life insurance higher than most financial products, including fixed and recurring deposits.

Nearly 70% respondents preferred life insurance as a preferred instrument, followed closely by mutual funds (69%) and fixed/recurring deposits (64%).

The findings based on a survey titled Household savings and simplification of insurance was conducted by Assocham and IndiaFirst Life Insurance

Life insurance is a preferred financial asset owing to "Higher cover at lower premium rates, simplified buying process aided with quick customer service and easy documentation" said the the survey.

The survey further observed that the respondents were quite cognisant about insurance as a financial instrument and also aware on the distinct types of insurance products with 35% respondents preferring to invest in a term plan.

Most millenials (63%) were earning and 60% of them saved less than 10% of their income.

It also highlighted that 20% respondents did recurring investments while 42% made a single investment based on the savings available and 3% invest haphazardly without following any fixed pattern.

"This is a disturbing trend as such a narrow overview of the future can turn out to be a vast problem at later phases," the survey noted.

The survey suggested insurance companies to come up with simple and easy to enrol plans to take care of such investment pattern.

There is a need to look for ways to bring out options whereby people can add up premiums to their policy whenever they have surplus funds and their policy benefits get increased accordingly, it said.

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