Why Most Indians Are Still Financially Unprotected Despite Being Insured, Reveals Survey

On the occasion of Insurance Awareness Day, June 28, an insurance survey, Suraksha Kavach Report 2025 by Bajaj Capital Insurance Broking, paints a rather daunting picture. Though insurance awareness and uptake have improved, the financial safety net it is meant to offer remains worryingly thin.

The report, titled India’s Insurance Reality Check, reveals a significant gap between insurance ownership and actual protection. Across income groups, age brackets, and gender lines, the study highlights how Indians hold insurance policies, and policyholders still lack true financial security in the face of medical emergencies, income disruption, and rising inflation.

A Nation One Emergency Away from Crisis

According to the report, 61 per cent of urban Indian households could be financially destabilised by a single hospitalisation, despite technically being insured. This statistic underscores a dangerous misconception: having a policy does not necessarily mean one is financially secure. In fact, many term plans are underpowered—offering 30–50 per cent less coverage than what is realistically needed.

“India is insuring itself—but not fast enough, and not deeply enough. This report shows a troubling disconnect between knowledge and action,” said Venkatesh Naidu, CEO of Bajaj Capital Insurance Broking. 

Gen Z and Working Women: A Double Vulnerability

The illusion is especially strong among India’s Gen Z. While 83 per cent of 21–30-year-olds actively research insurance, only 36 per cent have actually purchased a policy. Many younger adults are more inclined toward mutual funds, systematic investment plans (SIPs), and stock trading—viewing insurance as something that can wait.

Equally alarming is the status of working women. Only 19 per cent of working women own life insurance in their own name, and in 61 per cent of cases, insurance policies were purchased for them, not by them. 

A majority, amounting to 64 per cent, also find insurance “too complex to act on,” signalling structural barriers that cause true financial independence.

Overconfidence Among High Earners

Even among India's top earners, the report finds misplaced confidence. Those earning over Rs 25 lakh annually often assume their income level will shield them from risk. However, while income may rise five to eight times from lower brackets, term cover typically only rises by 2.5 times. A large segment still depends on employer-provided insurance which is often insufficient and easily voided upon job change.

Bridging the Gap with Tech and Transparency

The report says a shift from mere product penetration to deeper, more meaningful insurance engagement will improve things. With growing digital adoption, the opportunity to simplify, personalise, and demystify insurance through technology is greater than ever.

“Insurance is not about death or disease. It’s about dignity. You are not betting on bad luck—you are buying time, choice, and peace of mind for your loved ones,” says Sanjiv Bajaj, joint chairman and managing director, Bajaj Capital. 

The Road Ahead

As India moves deeper into the digital age, the real challenge lies in translating awareness into action. The report calls for stronger and consumer centric policy reform, along with the need for tech-enabled solutions, and stronger advisory support to close the coverage-adequacy gap to improve security for policyholders.

Insurance must evolve—not just as a product, but as a holistic financial planning tool that protects lives, livelihoods, and legacies. Until then, the illusion of being insured may continue to leave millions one emergency away from financial ruin.