Tag: Financial Lives of Poor Households

Insurance companies should align their sales practices to generate the best outcomes for low income households by ensuring easy access to a variety of products with disclosures that provide accurate information.

This blog post summarises key takeaways from a virtual workshop we recently hosted. It was conducted against the backdrop of a study that we recently concluded titled “Can information disclosures influence life insurance purchase decisions for low-income households?”.

There is a need for updated dataset on households’ consumption patterns, increased frequency of surveys on households’ balance sheet, and to collect data on financial well-being.

Unlike term plans that provide life risk cover or unit-linked schemes, where returns are market-linked, endowment plans offer maturity benefits upon survival & minimum guaranteed return.

Low-income households seek loans often, but credit is suitable if it helps sustain or improve financial well-being. This is what must be ensured by lenders, regulators & policymakers.

Tremendous efforts have gone into creating new authoritiessuch as the Central Consumer Protection Authority.

Low-income households work with irregular income inflows, resulting in shrinking financial planning horizon and necessitating frequent decisions in response to frequent changes.

Indian households and businesses hold their wealth primarily in physical assets like real estate, gold, and durables, while barely investing in any financial assets.

The social dimension of household finances is often missed by popular commentary on finance, which sees such decisions as being made by an individual for only themselves.

This data book compiles trends on household participation in formal financial services over the last few years.