Nearly 80% people rely on personal recommendations for buying insurance plans: Policybazaar

Policybazaar.com, an insurance aggregator, has provided an in-depth view of India’s health and life insurance buying behaviour in its detailed report titled - How India Buys Insurance. The report examines the buying behaviour of 3,300+ respondents from 27 cities across India, including metros, tier II and tier III cities.

Personal recommendation from friends and family or a known agent is the top trigger for insurance consideration for approximately 80 percent of the respondents. For 56 percent, a recommendation from friends and family was the main trigger for purchasing health insurance, while the number stood at 54 percent for life insurance.

Apart from this, brand familiarity and vintage seemed to play a key role in trust building. 58 percent and 64 percent respondents said that they trust the brands they are familiar with or the brands that have been around for a long time, both while purchasing health insurance and life insurance respectively.

Two key reasons that deterred the purchase of both health and life insurance included affordability issues and difficulty in understanding the product. While more than 40 percent respondents cited high premiums as the reason for not purchasing health and life insurance, around 53 percent found the products/ process difficult to understand and thus, dropped out. This indicates a clear need for education in the category along with simpler, more affordable options. The earlier this education starts, the easier it will be to hit the message home.

Around 80 percent respondents across health and life insurance looked online for information before purchasing the policy. However, over 85 percent ended up purchasing offline primarily through an agent they knew or was recommended by friends and family.

The convergence of online and offline mediums seems to be the way forward for the insurance industry.