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Last week, a significant report hit the financial wires: the India Protection Quotient (IPQ) 7.0, a collaborative effort by Axis Max Life Insurance Ltd. and KANTAR, the world’s leading marketing data and analytics company. The report can be accessed on the link (https://www.axismaxlife.com/maxlife-ipq). This year’s IPQ offers an invaluable deep dive into the evolving financial preparedness of urban India, revealing both encouraging progress and critical areas that still demand our collective attention.

The Bright Spots: Urban India’s Growing Financial Resilience

The IPQ 7.0 paints a largely optimistic picture of how urban Indians are approaching financial security. We’re seeing some truly positive trends:

• Record-High Protection Quotient: Urban India’s Protection Quotient has made an impressive leap to 48, up significantly from 35 in 2019. This growth is largely fueled by a deeper adoption of term insurance and the growing influence of digital platforms in financial decisions.
• Surging Life Insurance Ownership: For the first time, life insurance ownership has reached an all-time high, with a remarkable 78% of urban Indians now owning one or more life insurance products. This clearly indicates a broadening acceptance and understanding of its importance.
• Improved Financial Literacy: The Knowledge Index, a key indicator of financial awareness, has improved to 63 (up by two points), signifying that urban Indians are becoming more knowledgeable about life insurance and its benefits.
• Prioritizing Protection Over Price: Perhaps the most compelling shift is the change in consumer mindset. For the first time, 3 out of 4 urban Indians are prioritizing ‘cover’ over ‘cost’ when purchasing term life insurance. With 56% expressing confidence in their existing protection, it signals a growing maturity in how individuals view and secure their financial future.
• Gen-Z Leads with Proactive Planning: The youngest adult cohort, Gen-Z, is emerging as a standout. They boast a Protection Quotient of 41, with two-thirds already owning life insurance. Their strong intent toward mid-term goals like buying a house, a car, or planning vacations, coupled with their early adoption of protection, is truly commendable.
• Regional Shifts and Strengths:
  • South India continues its seven-year lead, driven by increased term insurance (33% to 37%) and savings product ownership (42% to 46%).
  • West India has shown significant strides, achieving the highest term plan ownership ever recorded in IPQ history at 41%.
  • North India also improved its Protection Quotient through better term plan uptake (28% to 31%).
  • East India, however, remains an area requiring more focused intervention, with stagnant ownership despite growing awareness.
• Salaried vs. Self-Employed: While the salaried class maintains a lead in Protection Quotient, it’s encouraging to see the self-employed segment showing gains in financial security, though there’s still a gap in their overall insurance ownership.

The Unfinished Agenda: Challenges and Overlooked Realities

Despite these encouraging numbers, the IPQ 7.0 also sheds light on some critical issues that demand our immediate attention and a more nuanced discussion:

• The Affordability Hurdle: A significant concern is that nearly 1 in 4 individuals still cite term insurance affordability as a major hurdle, with an increase in those (from 21% to 25%) feeling a lack of funds. This raises a pertinent question: in an era where consumers are readily embracing EMIs for discretionary pleasures like new phones, why is a crucial protection for family security still considered “too costly”? This paradox highlights a need for better education on value vs. perceived cost.
• The Gender Protection Gap: The report underscores a concerning disparity. While men saw their Protection Quotient rise to 50 (from 47), working women’s Protection Quotient remained stagnant at 48. Furthermore, women reported lower financial security for key life milestones such as retirement, children’s education, and marriage. This discrepancy points to a persistent oversight: the invaluable financial contribution of working women to families is often still undervalued or not adequately covered in family financial planning.
• Low Insurance penetration in North : It seems the geographic divide the people of north still need to think about buying insurance for protection of family. Though it had improved better with term plan foundation which i believe is a good signal. 

Time for Deeper Questions and Inclusive Planning

These findings make it abundantly clear that while awareness is rising, there’s a vital need for individuals to engage with qualified financial advisors. Advisors can help demystify complexities and facilitate truly effective planning. It’s high time we integrate some fundamental, often overlooked, questions into every financial discussion:

1. How much protection is truly sufficient for a family’s unique needs?
2. Why is the wife’s insurance not consistently considered and prioritized while planning a family’s overall financial protection?
3. Making insurance a part of more holistic financial planning rather than just looking as a standalone instrument ?

We need to move beyond outdated norms and ensure that financial protection is optimised for the entire family unit, recognising and covering the contributions of all members, not just the primary earner.

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