India’s life insurance industry has renewed its call for consumers and stakeholders to adopt a long-term perspective on insurance products, arguing that their contribution to financial security and economic resilience far outweighs isolated concerns such as mis-selling. The Insurance Awareness Committee–Life Insurance (IAC-Life) said life insurance plays a distinct role in household financial planning by providing income protection, financial continuity and disciplined savings. The committee cautioned that evaluating such products through a short-term lens can lead to an incomplete assessment of their economic value.
According to KamleshRao, Chairperson of IAC-Life, life insurance is designed to deliver benefits over time through family protection and long-term financial stability. While acknowledging that instances of mis-selling exist and must be addressed, Rao said they represent only a small fraction of an industry that continues to support millions of policyholders. He also highlighted the sector’s unique free-look period, which allows customers to review and return policies within a stipulated timeframe, enhancing transparency and consumer protection. The economic significance of the sector is reflected in its payouts. During FY2024-25, life insurers disbursed more than ₹6.3 lakh crore in claims, including death benefits, maturities, annuities and withdrawals, reinforcing the industry’s role as a financial safety net for households.
Rising financial awareness, increasing urbanisation and a growing salaried workforce are creating opportunities for higher insurance penetration. Industry observers believe that awareness campaigns and improved distribution networks could accelerate adoption in the industrial hub, particularly among younger consumers who currently form a large part of India’s protection gap. IAC-Life noted that 87% of Indians face a life insurance protection gap, a figure that exceeds 90% among those aged 18–35. Formed in 2019 under the Life Insurance Council, the committee comprises 24 life insurance companies working collectively to promote awareness and strengthen the country’s long-term financial security framework.
