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| 75pc India households confess inability to sustain beyond 6 months in even of disability’ | | | August 24 | 2007
SBI Life insurance unveiled groundbreaking findings on the behaviour and expectations India, with regard to acquiring and planning credit.
A whopping 75% of the Indian households declared that they would be unable ti easily maintain their current lifestyle and sustain beyond six months in the even of a disability following an accident, an illness or unemployment of the principal bread-earner.
The research titled Protecting Financial Commitments : Behaviour and Expectation’ was jointly conducted by SBI Life and it joint venture partner Cardif, world leader in credit protection products. Conducted across 18 countries, the research reveals three main phenomena : people share feelings of vulnerability towards “life contingencies”, appetite for credit consumption, and need for protection.
While addressing the Press Meet, Mr. US. Roy MD and CEO said, “The research initiative is a reflection of our customer centric focus to understand customers expectations and develop relevant solutions that bet meet their needs. Given the low penetration, as our survey reveals, there is a huge potential for Creditor Insurance in India. We believe this research will help our partners and many other financial institutions get closer to the consumer and understand the underlying social phenomenon that impacts business.”
One of the major finding has been that the financial vulnerability in India towards life contingencies is the highest. Although 98% of the Indians, the highest in the world, acknowledged the need for Creditor Insurance, only 8% of Indian Population buying risk cover is aware (against 43% global average) of such insurance and in effect only 12% of those aware have purchased creditor insurance, which is a miniscule 1% of the total Indian population. This explains the high financial vulnerability towards life’s contingencies, which is therefore amongst the top in the world.
Creditor Insuran1ce covers the payment of monthly installments that the borrow1er is justifiably unable to pay in the event of unforeseen circumstance impacting his steady source of income Creditor Insura1nce is normally bought for Mortgage, Car purchase, Household appliance purchase etc, at a rate ranging from 5% to 10% of the loan EMIs.
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