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LIFE insurance products are hot favourites of most urban Indians as an investment option and they are likely to earmark over half of their investable income for these products in the future, says a study by market research firm Nielsen.
According to Nielsen's study on the life insurance sector and investment patterns, `LIFE 2011', a little over 60 per cent of urban Indians hold insurance policies, which are likely to account for a large share of their future investments as well.
A look at the shift in investment habits over the past two years indicates that people are returning to fixed investment products, while investment in risky categories like equity is on the decline.
The study said that Indians, in practice, remain risk averse and the main drive behind an urban Indian's investment is returns, followed by unforeseen emergencies and child education.
Given the recent volatility in the equity markets and rise in commodity markets, urban Indians, being traditionally risk averse, are returning to safer, more traditional investment products like life insurance, given the tax benefits and limited risk associated with the product, Subhash Chandra, Nielsen's head of finance practice, said.
As per the study, there is a size able opportunity waiting to be tapped. The young investor segment accounts for nearly a fifth of the population and most of them presently do not have a life insurance policy. This segment is the also the most enthusiastic to invest in life insurance in the immediate future.
With the youth entering the workforce at high salaries these days, the young investor segment is a huge opportunity for most financial service organisations.
Coupled with the historical acceptance of life insurance as a safe investment and the added tax benefits that it provides, life insurance seems to have retained favour with even young investors, Chandra added.
Source :- My Digitalfc
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