Page 23 - The Insurance Times August 2024

Leveraging Technology

for Income Protection

and Replacement

Products in India: A Path

to Inclusive Insurance Aman Pal Singh

Founder & CEO,
B4E Insurtech Inc
Benefits for Expats Inc

Income protection and replacement insurance products are designed to provide a safety net for
individuals and families during periods of unemployment, disability, or illness. However, the
adoption of these products in India has been sluggish, primarily due to a lack of awareness,
affordability issues, and the complexity of traditional insurance processes.

The Landscape of Income Protection in Identifying Gaps and Opportunities
India 1. Awareness and Education: One of the primary gaps
in the Indian insurance market is the lack of awareness
India, with its rapidly growing economy and burgeoning
middle class, presents a unique yet challenging landscape about the importance of income protection products.
for income protection and replacement products. Despite Many individuals are unaware of how these products
significant economic advancements, the country remains can safeguard their financial future in times of crisis.
vastly underinsured. According to a report by the Insurance Insurers need to invest in comprehensive education and
Regulatory and Development Authority of India (IRDAI), the awareness campaigns to inform the public about the
insurance penetration in India stood at a mere 4% of the benefits and necessity of these products.
GDP in 2022-23, highlighting a significant protection gap.
This gap is particularly evident in the realm of income 2. Affordability: The cost of insurance products often
protection and replacement products, which are crucial for deters many potential customers, especially those in
ensuring financial stability in times of income disruption. lower-income brackets. There is a pressing need for
affordable, flexible insurance solutions that cater to the
Income protection and replacement insurance products are diverse financial capacities of the Indian population.
designed to provide a safety net for individuals and families Innovative pricing models and micro-insurance products
during periods of unemployment, disability, or illness. can help make income protection accessible to a
However, the adoption of these products in India has been broader audience.
sluggish, primarily due to a lack of awareness, affordability
issues, and the complexity of traditional insurance processes. 3. Digital Accessibility: Traditional insurance models rely
Additionally, the COVID-19 pandemic has underscored the heavily on paperwork and face-to-face interactions,
need for robust income protection mechanisms, as millions which can be cumbersome and time-consuming. There
faced job losses and income uncertainties. is a significant opportunity to digitize the insurance

The Insurance Times August 2024 21