National Insurance Awareness Day: 76% Indians Unsure Whether Their Insurance Coverage Is Adequate

Even as more Indians are buying insurance, most are not sure if it will actually help when it matters. A new survey by CoverSure, an InsurTech platform, shows that 76 per cent of Indian policyholders are uncertain whether their existing insurance coverage is sufficient. The survey, released ahead of National Insurance Awareness Day (June 28), highlights a clear disconnect between rising insurance ownership and actual understanding of what those policies offer.

The report, based on responses from over 5,000 people across metro, Tier 2 and Tier 3 cities, finds that while policy ownership is growing steadily, 71 per cent of respondents said they hold between two and five policies, most people remain unclear about what they are covered for.

Life insurance remains the most widely held product (63 per cent), followed by health insurance (24 per cent) and motor insurance (13 per cent). However, owning a policy is not the same as knowing how it works. About 65 per cent of respondents said they had limited or no understanding of their policy's terms, including benefits, exclusions, and how to file a claim. Only 35 per cent reported full clarity.

This gap is not just limited to individuals. A worrying 60 per cent of dependents don't even know they are covered under any insurance, let alone the specifics. Just 1 in 10 dependents could correctly describe what protection they have, which could directly lead to delays or outright losses in claim settlements.

"Focusing on insurance penetration alone isn't enough," says Saurabh Vijayvergia, founder and CEO of CoverSure. "If policyholders don't know what's covered or how to use it, the very purpose of insurance is defeated."

How do people 'Manage' their insurance?

The issue with insurance coverage goes deeper when it comes to how people manage their insurance information.

The survey finds that around 29 per cent of respondents say they rely on physical files to store policy documents. Others use spreadsheets (around 26 per cent), SMS alerts (24 per cent), or basic digital folders (21 per cent), none of which are efficient during emergencies or claim submissions.

The wide and fragmented storage of insurance policy documents not only slows down claim processing but it can also increase policyholder's risk of missed renewals and rejected claims.

What is also striking is the apparent contradiction in how people want help. While 36 per cent prefer human advisors and 26 per cent are open to digital assistance, a large chunk, 38 per cent, believe they don't need any help at all, despite having limited knowledge about their coverage.

This misplaced confidence adds another layer to the problem. In short, India may be moving forward on insurance penetration, but not necessarily on protection. The report is a timely reminder that awareness, not just ownership, is what determines whether a policyholder truly has financial protection.