25% of the people do not think that life insurance is important and has made a case for effective marketing to increase penetration. At the behest of insurance regulator Insurance Regulatory and Development Authority (IRDA), the National Council of Applied Economic Research (NCAER) has suggested that the private sector and the government should work together in public-private partnership to enhance awareness about the benefits of insurance, especially in the age group of 20-30 years.
There is a low propensity for life insurance whereby one-fourth of the households did not consider life insurance as important. People in rural areas are not able to clearly understand the extent of coverage being offered under particular insurance plan which results in low penetration.
AdvertisementThe awareness levels across the country need to be stepped up by the insurance companies or the regulatory authority. The rural poor and the urban population should be presented with different insurance packages.
The public policy should address the insurance awareness needs of the people. To reach out to the untapped market, mass media awareness campaign should be undertaken. Youngsters in the age group of 20-30 years should be targeted so as to create awareness in them.
The insurance penetration in India dropped to 5.1% in 2010-11 and from 5.2% in 2009-10. While life insurance penetration fell from 4.6% to 4.4% during the year, general insurance sector saw an increase in penetration from 0.6% in 2009 to 0.7% in 2010.