The life insurance sector in India will largely be driven by the propensity to save among Indians, according to a report by market research firm, RNCOS, analysing the Indian insurance market.
This means that life insurance products with a higher element of savings compared to protection will be more popular with customers. Of this, unit-linked insurance products (Ulips) will account for over half of total life insurance sales in India because they package the benefits of life risk cover, investments, and a tax saving facility in a single product.
At present, Ulips are more common in urban population as rural population lacks awareness of these products. But rapid urbanisation, rising education levels and growing employment will help life insurers to exploit the untapped rural population in the future.
In addition, the development of more organised life insurance distribution channels like banks and other financial institutions will increase sales of Ulips because these financial institutions have their own established customer bases.
