While younger individuals in India are securing life insurance earlier—dropping the average first-time buyer age from 33 to 28—many remain underinsured, with coverage far below the recommended level of at least 10 times their annual income, according to a recent study by Bajaj Allianz Life Insurance, conducted in collaboration with NielsenIQ.
The study, titled ‘Underinsurance Survey 2025’, sheds light on the state of life insurance coverage in India, revealing a significant gap in financial protection. The survey reveals a significant shift in life insurance trends, with the average age of first-time buyers dropping from 33 to 28 years. Family responsibilities, income levels, and health concerns emerged as key drivers for insurance adoption.
Notably, 81% of respondents believed that life insurance coverage of less than 10 times their annual income was sufficient for financial security. However, the actual coverage figures tell a different story—in urban areas, the average life cover stood at 3.1X times annual income, dropping to 2.9 times for Mass Affluent and Affluent families respectively.
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Speaking on the survey findings, Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance, said, “India, despite being one of the world’s fastest-growing economies, has a total sum assured at just 70% of GDP—significantly lower than countries like the US (251%), Thailand (143%), and Malaysia (153%), highlighting a critical protection gap. This shortfall can leave families financially vulnerable, forcing them to dip into savings or liquidate assets in times of crisis, which can derail their life goals. To truly safeguard one’s loved ones, it’s essential to assess coverage needs holistically—factoring in income, liabilities, and future aspirations. A simple rule of thumb is to have life cover at least 10 times one’s annual income, ensuring financial security when it matters most.”
Key Findings of the Survey
Perception vs. Reality: Indians believed they had coverage of 6.4 times their income, but the actual coverage averaged just 3.1 times, highlighting a major gap in financial preparedness.
Lack of coverage reviews: Over one in three Indians have never reviewed their life insurance coverage, even after major life events. This number rises to 43% among self-employed and affluent individuals, putting them at higher risk of underinsurance.
Confidence in coverage: While younger individuals are purchasing insurance earlier, the 46-50 age group, which typically bought policies at age 33,
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