Making Insurance an Inclusive Tool for Financial Protection.

Developed economies like USA, UK etc. have utilised insurance as a supplementary tool for creating a protected society by strengthening the existing social security net through affordable health insurance programmes, pension and annuity insurance plans, liability insurance etc. In comparison, insurance in India is still seen as an investment tool, rather than as a risk mitigation mechanism. Though Government has taken measures to replicate the model followed in West through social security schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jan Arogaya Yojana (PMJAY) etc., but still a large section of the society perceives insurance as a means to get tax benefits, instead of a buffer to protect against financial losses in case of an unfortunate event. Protection Gap which is a measure of the uninsured losses of a country, is significantly higher for India when compared to other developed or developing nations. The mortality protection gap in life insurance, which dominates the Indian insurance industry, is at staggering 87% as per a survey done by National Insurance Academy. Despite health insurance being the top contributor under non-life segment in India, the health protection gap stands at 73%. The estimated pension protection gap is even higher at 93%. Thus, it becomes imperative for the Indian insurance industry to bridge these gaps through high decibel awareness campaigns, so that citizens can leverage insurance as a tool for financial protection (and not as substitute for return-oriented investments) and reap its real benefits. [ABSTRACT FROM AUTHOR]