By buld_online 
India’s insurance journey has made strides in recent years, but the latest Suraksha Kavach Report 2025 by BajajCapital Insurance Broking Ltd. paints a nuanced picture: while penetration is increasing, the average Indian remains financially exposed when it truly matters. The report, launched on Insurance Awareness Day (June 28), calls this the “insurance paradox”—people know more, yet protect less.
Despite rising digital awareness and access, 61% of urban Indian households could be financially destabilised by a single hospital bill, and the average term policy is underpowered by 30–50% compared to actual needs. “India is insuring itself, but not fast enough to match the risks it’s facing,” says Venkatesh Naidu, CEO, BajajCapital Insurance Broking Ltd.
The report identifies five major gaps: the Gen Z dilemma, the female protection gap, a stark urban-rural divide, health cover inadequacy, and a disconnect between income and protection.
Gen Z: Aware but delaying action
Although India’s youngest earners (ages 21–30) are financially savvy—setting up SIPs, tracking credit scores, and investing—they are postponing insurance. 64% are actively researching insurance online, but only 41% have actually purchased a policy. The top reasons? High premiums, product confusion, and a belief that “insurance can wait.”
Women: Contributing, but not covered
Women remain severely underinsured despite growing roles in household finances. Only 1 in 5 working women own life insurance in their name, and many policies are bought for them, not by them. 71% of women surveyed said they found insurance too complex to act on, pointing to a financial autonomy gap rather than just a protection gap.
Rural vs. Urban: Access ≠ Empowerment
In rural India, coverage often comes via schemes like PMJJBY or employer-linked benefits, but without understanding or ownership. Only 16% of rural policyholders bought insurance independently, and just 19% are aware of health top-ups, compared to 47% in urban areas. Most rely on agents or influencers, with digital journeys still hindered by language and trust issues.
Income ≠ Insurance
High income doesn’t equal high protection. While those earning over Rs 25 lakh annually have average term cover of Rs 1.1 crore, their coverage-to-risk ratio lags behind. Lifestyle inflation, asset accumulation, and healthcare costs outpace policy upgrades, leading to a false sense of security.
The report concludes that India’s biggest insurance problem isn’t lack of access—it’s lack of action. “Even the best policy is useless if it’s delayed, underpowered, or misunderstood,” the report states.
BajajCapital urges stakeholders to shift from seeing insurance as a backup plan to building it as a foundation of confidence. As Sanjiv Bajaj, Joint Chairman & MD, puts it: “Insurance is not about death or disease. It’s about dignity.”
Bottom line: India isn’t underinsured by default—it’s underinsured by delay. The wake-up call has been rung. The time to act is now.