Life insurance penetration in India stands at 3% in 2022-23 (Swiss Re Sigma Report). There are multiple barriers to life insurance uptake and persistency in India, particularly for the low-income segment. An appropriate life insurance cover can act as an essential risk mitigation tool in the portfolios of the poor. However, we see that endowment products, insurance bundled with savings, are popular among the low-income segment for whom the surrender terms and return characteristics are markedly unsuitable. In this deck, we discuss some factors influencing life insurance take-up, the problem with endowment life insurance for the low-income segment, and how better disclosures could be the first step in helping households choose the right insurance product for them.
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