Why insurance penetration is low in India is mainly because of a lack of awareness. Proper knowledge and awareness of the benefits will give people more genuine reasons to invest in insurances.
People in India are not taking insurance seriously just because they are busy making their finances stable and secure. The other group of people who have got it all sorted is approaching for insurance, but they have their requirements set already.
Reasons why insurance penetration is low in India
Any insurance company, randomly approaching a random set of people is bound to face the insurance penetration issue. So the problem is not with the Indian mindset of a beneficiary, it is majorly with the sales strategies of insurance companies.
Not Targeting the Right Audience
Insurance companies are targeting every third family and every second relatives and friends. This is not going to work like this.
People who are actually financially secure can only think of things like insurances. It is every-time a last priority of investing money for everyone, unless it is made mandate.
The first thing you can do is, filter out your target audiences. A person with even minor health issues is more likely to convert than a person who is healthy all his life. A person with at least one minor accident is likely to convert than the one who has not all met with an accident.
Having Generalized Insurance Plans
The better solution for this is making strategies and calculations that can make people think of insurance as a priority. You can, for instance, create a micro insurance plans for individuals.
Having a questionnaire on the insurance plans, will help generate the individual plan. This insurance plan will have more probability of penetrating through.
Lack of Insurance Education
There are only IFs and THENs in insurances. A proper education and awareness can sort it out well. An add-on for the insurance plan will always come into benefit in this scenario.
The reason why insurance penetration is low in India is quite common. A lack of concern from both the ends – insurance company’s and the beneficiary’s!