Self-employed term insurance purchases soar by 50% YoY: Study
Self-employed individuals are increasingly following best practices by securing life insurance coverage equivalent to 10 times their annual income, the Policybazaar study reveals. For instance, those earning Rs 3-5 lakhs opt for Rs 39 lakh coverage, while higher income earners (above Rs 10 lakh) select policies averaging Rs 1 crore, it claims.
According to a study by Policybazaar, self-employed term insurance purchases soared by 50 per cent year-on-year.
It says that the self-employed segment is now constituting 70 per cent sales from plans tailored for self-employed individuals.
Self-employed individuals are increasingly following best practices by securing life insurance coverage equivalent to 10 times their annual income, the study reveals.
For instance, those earning Rs 3-5 lakhs opt for Rs 39 lakh coverage, while higher income earners (above Rs 10 lakh) select policies averaging Rs 1 crore, it claims.
A striking 74 per cent of self-employed term insurance buyers are aged between 27 and 38, reflecting the proactive approach of younger entrepreneurs in securing their financial future, the study by Policybazaar reveals.
Self-employed males make up the majority of policyholders at 84 per cent, but female participation is also gaining traction.
As per the study, Mumbai tops the list of term insurance purchases by self-employed individuals, followed by Delhi, Chennai, Lucknow, Bengaluru, and Hyderabad.
This surge is fueled by tailored term plans that eliminate the need for traditional income documentation; the new approach no longer requires Income Tax Return (ITR) or salary proof documentation - broadening access to specialised term insurance plans for self-employed individuals, as per the Policybazaar study.
The study says that many digital metrics are now being used to assess the financial stability of individuals and business owners, particularly when traditional income proofs are difficult to obtain. One key metric is the individual's creditworthiness, evaluated through their credit or loan history.
Rhishabh Garg, Head of Term Insurance at Policybazaar, says “The significant uptake of term insurance among self-employed individuals is a clear indicator of rising financial awareness. With flexible, specialized plans now available, it’s easier than ever for business owners and freelancers to protect their families and secure their financial futures. We urge self-employed individuals to explore these offerings and ensure they are adequately covered."
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